To remove an officer, a corporation must obtain a majority vote of the shareholders. It is recommended that members show "just cause" for the removal of the officer.
As a general rule, officers have a fiduciary duty to act in good faith, and exercise due diligence when making business decisions for the company. When an officer violates this duty, there will be a just cause for his or her removal.
Since the corporate laws of each state may vary, look to the laws of the state where the company was incorporated.
Examples of "just cause" for removal include:
If just cause exists, document how the officer was deficient in their performance or execution of duties. This proof can come in the following forms:
Once it has been decided that the director or officer must leave the corporation, the corporation must have a majority of the shareholders vote to remove that person. After that, the person must be informed of the removal process.
The protocol for removing an officer or director includes:
If the corporate by-laws provide for election by districts with primary elections in each district, the petition for removal of a director must be signed by at least 20% of the members living in the district where the director was elected. Check the corporate laws of your state.
It may be necessary to hire a lawyer when attempting to remove a corporate officer. Your attorney can help you with the removal process, and can review any legal documents. This can help to ensure that you’re removing the corporate officer in accordance to state laws. Also, your attorney can represent you in court if you need to file a lawsuit.
Last Modified: 05-09-2014 02:38 PM PDTLaw Library Disclaimer
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