Published in the Portsmouth Herald
On January 1, 2014, changes to the law governing New Hampshire
business corporations (the New Hampshire Business Corporation Act,
NH RSA 293-A) went into effect. The updated statute reflects the
current best practices relating to the governance of New Hampshire
corporations and includes provisions for electronic notification
and communication with shareholders and directors. As these changes
go into effect, New Hampshire corporations should consider updating
their bylaws to take advantage of the updated laws. Below is
a summary of key changes to the corporate laws and situations where
a corporation may want to consider amending its bylaws.
1. Annual Meeting of Shareholders: The New Hampshire corporate law
provides that the annual meeting of shareholders may be conducted
by written consent of the shareholders. Although many corporations
assumed that the prior version of the New Hampshire Business
Corporation Act authorized this action, the revised act codifies
this common practice, and makes it clear that directors may be
elected by written consent in lieu of an annual meeting.
2. Written Consents of Shareholders now need to be dated: The
requirements of written consents of shareholders have changed and
now require that each shareholder who signs a written consent
include a date with his/her signature. The revised corporate law
does not require that a director's signature be dated.
Shareholders must be aware of this requirement in order to ensure
that the consents that they sign are valid.
3. Participation in a Shareholder Meeting by Remote Communication:
The revised corporate law provides that shareholders may
participate in a shareholder meeting by means of remote
communication if such participation is authorized by the board of
directors and the corporation has adopted reasonable measures to
verify (a) that each person participating remotely is a
shareholder, and (b) such shareholders are provided with a
reasonable opportunity to participate in the meeting and to vote on
matters submitted to the shareholders, including an opportunity to
communicate, and to read or hear the proceedings of the meeting,
substantially concurrently with such proceedings. Boards of
Directors may want to evaluate their procedures for holding
shareholder meetings and include in their bylaws that the
corporation will take appropriate steps to meet the requirements
set forth in the revised statute.
4. Proxies: The revised corporate law allows proxies to be
appointed by electronic transmission. This change makes it easier
for shareholders to appoint proxies. In order to take advantage of
this change, a corporation may want to amend its bylaws to
expressly provide that proxies may be appointed by electronic
transmission.
5. Notice: The revised corporate law allows for the delivery of
notices and other communications by electronic transmission if the
recipient consents to receiving such notices and communications by
electronic transmission. With regard to communication with
shareholders corporations must have each of its shareholders who
will receive electronic notification execute a written consent
authorizing delivery of notices and other communications by
electronic transmission. For communication with directors,
the corporation must either obtain a written consent or authorize
delivery of notices and other communication electronically in the
corporation's articles of incorporation or bylaws.
6. The Conduct of Meetings: The revised New Hampshire corporate
law provides that at each meeting of shareholders, a chair shall
preside at the meeting and the chair shall have the authority to
determine the order of the of business at the meeting and establish
the rules of conduct for the meeting. This is a new provision and
corporations may need to amend their bylaws to make it clear who
will serve as chair at the shareholder meetings.
In addition to the changes listed above, there are a number of
technical changes that improve the ability of a corporation to
operate in New Hampshire. New Hampshire corporations must be aware
of the changes that went into effect on January 1, 2014, in order
to take advantage of these changes and to ensure that the actions
taken by the corporation's shareholders and board of directors
are valid.
Patrick Closson serves as vice chair of the Corporate Department
at McLane, Graf, Raulerson & Middleton and as managing director
of the firm's Portsmouth office.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.