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What is a Quorum?

A quorum is the minimum number of people having a vested interest in an organization required to ensure the validity of a meetings proceedings under the corporate charter. This makes sure that adequate individuals are available in the meeting prior to the board makes any changes or alterations. It consists of a group of a huge size so as to ensure business meetings can be conducted in an appropriate manner.

How Does a Quorum Work?

There is no specific quantum of members that decides the validity of a quorum. However, it would be best to include the maximum number of members within a firm in it. Also, the company can include a specific number in its by-laws to be more clear about it. The company should ensure that the number decided upon is not that small so that it doesn't represent the organization, but also not that large that it becomes difficult to conduct a meeting. The members in a quorum should represent the company and help in making relevant decisions. For instance, an organization with 10 board members would have a quorum of 6 members having an easy majority as compared to 51% of each shareholder in the firm.

Roberts Rules for the Absence of a Quorum

Roberts Rules of Order came up with the idea and policies of a quorum. These policies were formed to safeguard the interests of organizations from the decision-making authority of limited yet powerful members. In case, the meeting of a company doesn't have a quorum, then the present attendees can follow up to 4 actions on the company's behalf. The first way is to adjourn the meeting and reschedule it at a later date when more members can be a part of the meeting. The second method requires the present members to adjourn the meeting and meet at an already-scheduled meeting. This can be possible when there are consistently scheduled meetings, and no time constraint is involved in the decision making process. Another method would be calling up for a quick recess where the present members would wait hoping that more members would show up or join them later. This usually takes place when a few members are on a break, resulting in no quorum during the middle of the meeting. There can be times where quorum cannot be met under certain cases. In such cases, the company can create a committee for calling missing members.

Related Topics

• Shareholder Democracy Definition
• Quorum Definition
• Information Circular
• Straight and Cumulative Voting
  • Statutory (Straight)
    
  • Cumulative Voting
  • Plurality Voting
• Class Voting Shareholders
• Changing the Voting Rules
• Supermajority (Voting)
• Shareholder Sponsored Proposal