Since the stockholders own the corporation, the officers and directors must ultimately serve their interests. Still, this does not mean that stockholders are powerless concerning the affairs of their corporation. The rights of the stockholders are governed by the bylaws of the corporation as well as by the Nevada Revised Statutes. The stockholders vote on major changes in the basic organization of the corporation. These may include:
- The election of the Board of Directors
- A change in the Bylaws
- A change of Name
- A change in the nature of business
- A change in type and number of shares of stock issued
- A change in size or composition of the Board
- Encumbering corporate assets
- A dissolution or winding down of the corporation
- Selling, consolidating or merging the corporation.
Stockholders, like directors, cannot act unilaterally. They must act either at a regular stockholders' meeting (ordinarily held annually after the end of the fiscal year) or at a special meeting of the stockholders (ordinarily called at the request of the board). There must be notice of the meeting and notice of the agenda (items to be discussed and voted upon). A minimum of 10 days' notice and not more than 60 days' notice must be provided. Waivers of notice are allowed if the Board fails to notify stockholders of the meeting or an emergency prevents adequate notice. Stockholders may vote in person or vote by proxy, which means having another person vote in the stock holder's place. Remember that shareholders vote their shares and it is the number of shares--not the number of shareholders--that decide the vote. As with directors, there must also be a complete and accurate record (minutes) of a stockholders' meeting. Occasionally, there will be a combined meeting of stockholders and directors. This is perfectly permissible, however, you still need complete minutes of meetings.
