- Requirements may vary from state to state, but generally, shareholders' meetings take place once per year. The basic purpose of a shareholders' meeting is to elect directors for the corporation. Other meetings may be held throughout the year for other purposes, and these meetings are referred to as special meetings. Both management staff of the corporation and the shareholders themselves are able to submit proposals to be voted on by the group.
- There are actually three types of shareholder meetings. The first is the annual shareholders' meeting, which occurs once per year. The second type is a special meeting, which is called on shorter notice if there is an important matter to discuss that requires shareholder approval. The third type of shareholder meeting is known as a combined meeting, where the standard annual business is discussed as well as other matters that typically would have been reviewed at a special meeting.
- Sometimes it is impossible for all shareholders to be present for a meeting. Large corporations sometimes have shareholders across the country or even globally, and other business commitments or circumstances can at times prevent some shareholders from attending scheduled meetings, particularly special meetings. Even though all shareholders must be notified in advance about special meetings, it is difficult to get away from normal business activities to travel long distances without much advance planning.
- In some states, it is possible to hold shareholder meetings without shareholders being physically present. In this case, business decisions would be made by written consent without the shareholders being present at an actual meeting. Proxy voting is another solution to this problem. Proxy voting occurs when a shareholder authorizes another party to vote on her behalf at the shareholder meeting. Shareholders usually use this method when they cannot physically be present themselves, and trust another shareholder or other person to vote appropriately.
- Incredibly important decisions have been made at major shareholder meetings throughout history. Decisions can be made to sell a company, launch a new product, re-invest a significant portion of the assets of the company, and sometimes to close the doors of a company forever. For example, the decision made by GM to make a bid to buy out Dodge was decided by shareholders in a shareholder meeting.
