Clarification on "at least two-thirds of the votes cast"

[Guest Cathy Guest]

We are amending our Certificate of Incorporation of a NonStock Corporation. How do we run this vote. 

If there are 127 members, one reading this that we must 1) vote at a meeting and 2) we must have at least 2/3 of quorum. Our Bylaws require a 1/3 quorum for any voting at a meeting to occur. 

Our certificate does not specify how to amend the certificate. It only specifies that 'to amend the Bylaws' we need a 2/3 vote. 

I am referring to section d and e, below, for my interpretation.

Another interpretation is that we need 85 affirmative votes to pass the certificate, given that we have 127 members. But because it states "at least 2/3 of the votes cast" I don't see how that is correct, given not all members will vote. 

Can you please confirm if we only need 2/3 of a quorum or if it is 86 affirmative votes according to the passages below. 

Thank you. 

From CT Nonstock law: 

"Sec. 33-1142. Amendment by board of directors and members. (a) If a corporation has members, an amendment to the certificate of incorporation shall be adopted as provided in this section. A proposed amendment must be adopted by the board of directors.

(b) (1) Except as provided in sections 33-1141, 33-1145 and 33-1146, after adopting the proposed amendment, the board of directors must submit the amendment to the members entitled to vote on the amendment, if any, for their approval. If any members are entitled to vote on the amendment to the certificate of incorporation, the board of directors must also transmit to such members a recommendation that such members approve the amendment, unless the board of directors makes a determination that because of conflicts of interest or other special circumstances it should not make such a recommendation, in which case the board of directors must transmit to such members the basis for such determination.

(2) The board of directors may condition its submission of the amendment to the members on any basis.

(c) If members are entitled to vote on the amendment to the certificate of incorporation, the members must approve the amendment, either before or after the actions required in subsections (a) and (b) of this section, as provided in subsection (e) of this section.

(d) If the amendment is required to be approved by the members, and the approval is to be given at a meeting, the corporation must notify each member entitled to vote on the amendment, if any, of the meeting of members at which the amendment is to be submitted for approval. The notice must state that the purpose, or one of the purposes, of the meeting is to consider the amendment and must contain or be accompanied by a copy of the amendment.

(e) Unless sections 33-1000 to 33-1290, inclusive, the certificate of incorporation or the board of directors acting pursuant to subdivision (2) of subsection (b) of this section requires a greater vote or a vote by class of members, the amendment to be adopted must be approved by: (1) If no class of members is entitled to vote separately on the amendment as a class, at least two-thirds of the votes cast by the members entitled to vote thereon; and (2) if any class of members is entitled to vote on the amendment separately as a class, at least two-thirds of the votes cast by the members of each such class.

(f) If the corporation has no members, or no members entitled to vote, the proposed amendment shall be adopted by vote of at least two-thirds of the directors present at a meeting of the board of directors at which a quorum is present."

 

[Rob Elsman]

Ask an attorney familiar with Connecticut corporation law.

[Josh Martin]

I will first say that, in any event, an interpretation that "at least 2/3 of quorum" is required is almost certainly incorrect. If someone is suggesting this is the requirement, I think this wording is the result of a misunderstanding of the meaning of the word "quorum." The word "quorum" refers to the minimum number of members who must be present in order to conduct business. You say, for instance, that "Our Bylaws require a 1/3 quorum for any voting at a meeting to occur." So if a quorum is 1/3 of the members, and there are 127 members, then the quorum is 42.

That means there must be at least 42 members present to conduct business. But there may well be more than 42 members present, and may also be more than 42 members voting. But nonetheless, the quorum is still 42. So to base a voting requirement on a percentage of the quorum makes no sense. I am aware of the fact that many people will incorrectly use the word "quorum" to mean the total number of members present, provided that number is at least as much as the quorum requirement. But that usage is incorrect. Some organizations may well have a voting requirement of 2/3 of the members present (or even a requirement of 2/3 of all members) rather than 2/3 of the votes cast, but to describe such a voting requirement as "2/3 of the quorum" is incorrect.

It must also be understood that the term "quorum" has no meaningful application outside of a meeting. There are sometimes rules providing that a certain number of members must cast votes in order for a vote taken by mail to be valid, but this is not properly described as a "quorum" requirement.

So I think what you are really asking is which of these is the voting requirement:

• 2/3 of the votes cast
• 2/3 of all members
• 2/3 of the members present (and the last of these, obviously, only makes sense if the vote is taken at a meeting)

In any event, the cited information in the present question consists of quotations from Connecticut state law and the question involves amending a certificate of incorporation, which is a legal instrument. Therefore, it seems to me that questions concerning this matter should be directed to an attorney.

Edited March 17, 2023 at 04:41 PM by Josh Martin

[Guest Cathy]

Thank you for clarifying quorum vs present. That makes sense...a vote is ...2/3 or a majority ...of votes of members present so long as a quorum has taken place. 

We will seek advice from an attorney. Thank you so much. 

 

[Gary Novosielski]

On 3/17/2023 at 12:20 PM, Guest Cathy Guest said:

We are amending our Certificate of Incorporation of a NonStock Corporation. How do we run this vote. 

If there are 127 members, one reading this that we must 1) vote at a meeting and 2) we must have at least 2/3 of quorum. Our Bylaws require a 1/3 quorum for any voting at a meeting to occur. 

Our certificate does not specify how to amend the certificate. It only specifies that 'to amend the Bylaws' we need a 2/3 vote. 

I am referring to section d and e, below, for my interpretation.

Another interpretation is that we need 85 affirmative votes to pass the certificate, given that we have 127 members. But because it states "at least 2/3 of the votes cast" I don't see how that is correct, given not all members will vote. 

Can you please confirm if we only need 2/3 of a quorum or if it is 86 affirmative votes according to the passages below. 

Thank you. 

I am not a lawyer, in Connecticut or anywhere, but if the English language spoken there is anything like that spoken elsewhere, including the dialect employed in RONR, the phrase two-thirds of the votes cast means that out of all the votes cast, two-thirds of them or more must be affirmative votes in order to adopt the question.

A quick way of calculating this is, if the number of Yes votes is double the number of No votes (or greater) then the motion is adopted.  Abstentions do not matter, so people who sit and fail to vote do not affect the outcome, since the have cast no votes.  Only a Yes or a No is a vote. 

As @Josh Martin points out, this should not be confused with a quorum requirement which has no affect on voting thresholds.

 

Edited March 17, 2023 at 04:52 PM by Gary Novosielski

[Guest Cathy Guest]

I meant to write "2/3 or a majority of the votes cast so long as a quorum has been achieved.

 

Thank you, again.