|
||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
Home | Business | Public Company Reasons for a Company to Reject a Proposal 1. The company considers the proposal not a proper subject for taking action. This depends on the applicability under the State laws. 2. The proposal would require the company to violate state and federal laws. 3. The proposal contradicts the company’s proxy rules and regulations. 4. The proposal benefits only the shareholder who proposed the resolution and not all the other shareholders, or if it is written out of a grudge against the company. 5. The proposal accounts for only 5% or less of the company’s assets at the end of the recent fiscal year, or less than 5% of the net earnings and gross sales at the end of the recent fiscal year. 6. The proposal involves issues outside the company’s control. 7. The proposal relates to the conduct of ordinary business operations of the company. 8. The proposal concerns an election to office. 9. The proposal is counter to a resolution to be submitted by the company at the annual meeting. 10. The proposal has been rendered moot. 11. The proposal is a duplicate of another proposal submitted earlier by another shareholder, which is going to be voted on at the annual meeting. 12. The proposal is a duplicate of any proposal submitted within the preceding 5 calendar years. 13. The proposal relates to specific amounts of cash or stock dividends. The Need to Consider Proposals in a Timely Manner The shareholders must be quick to act since the company has until the last 60 days before the annual meeting to disclose the proxy statements. The company has to notify the SEC that it is omitting and rejecting the proposal based on the 13 reasons and the SEC will review the situation and decide if the company has the right to do that based on the rules. The Internet and the variety of software available today are helping the shareholders and corporations regarding the implementation of corporate resolutions in a timely manner. Article Source: http://www.articlewheel.com
David Gass is President of Business Credit Services, Inc. His company publishes afree weekly e-newsletter on Small Business Consulting at their web site www.smallbusinessconsulting.com
|
  RSS Feeds by Category |
|||||||||||||||||||||||||||||||||||||||||||||||||||||
