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Simple English definitions for legal terms
proxy
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A quick definition of proxy:
A proxy is a person who represents someone else at a meeting for a company. They have a special document that proves they can do this. The law says that the proxy has the same rights as the person they are representing. This means they can vote and hear what is happening at the meeting. They can also vote without going to the meeting. A proxy statement is a letter that the company sends to shareholders before the meeting. It tells them what will be voted on and who is running for the board of directors. The Securities and Exchange Commission (SEC) makes sure that companies follow the rules when they send out proxy statements.
A more thorough explanation:
A proxy is a person who represents someone else at a company's shareholders' meeting. They have a legal document that proves they have the authority to act on behalf of the shareholder.
According to the Delaware General Corporation Law (DGCL), the proxy holder has the same rights as the shareholder they represent. This means they can participate in the meeting, vote, and hear the proceedings of the meeting, whether it's held in person or remotely.
For example, if a shareholder cannot attend a meeting, they can appoint a proxy to attend and vote on their behalf. The proxy will have the same rights as the shareholder to vote and express their consent or dissent in writing without a meeting.
Proxy can also refer to a proxy statement, which is a written notice that companies must send to shareholders before voting by proxy. The statement includes information about the issues to be voted upon, the names of directors up for election to the board, and votes on transactions.
For example, if a company wants to merge with another company, they must send a proxy statement to their shareholders. The statement will explain the details of the merger and ask shareholders to vote on whether or not they approve of the merger.
The Securities and Exchange Commission (SEC) requires companies to file their proxy statements in compliance with Schedule 14A. Companies file proxy statements on a Form DEF 14A.