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Can a president fire a treasurer or secretary on the board of directors?

Can a president fire a treasurer or secretary on the board of directors?

Full question:

Can the president of a corporation remove or fire the treasurer or secretary if all are on the board of directors and have equal amounts of stock?

Category: Corporations
Date: 04/07/2025
State: National

Answer:

The ability to remove or fire board members, including the treasurer or secretary, is determined by the corporation's articles of incorporation and bylaws. These documents may outline specific procedures for removal, such as requiring a majority vote from the board or a certain percentage of the shareholders.

According to Indiana law (IC 23-1-33-8), directors can be removed in the manner specified in the articles of incorporation. Shareholders or directors may remove one or more directors with or without cause, unless the articles state otherwise. If a director is elected by a specific group of shareholders, only those shareholders can vote on the director's removal. If cumulative voting is allowed, a director cannot be removed if enough votes against their removal match or exceed the votes needed to elect them. If cumulative voting is not permitted, a director can only be removed if more votes are cast for removal than against it. Additionally, removal must occur at a meeting specifically called for that purpose, with notice stating that removal is on the agenda.

This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.

FAQs

Can a treasurer or secretary be removed without cause?

Yes, in many cases, a treasurer or secretary can be removed without cause, depending on the corporation's articles of incorporation and bylaws. Indiana law allows for directors to be removed with or without cause unless specified otherwise in the governing documents. However, if a director was elected by a specific group of shareholders, only those shareholders can participate in the removal vote. Always check the corporation's bylaws for specific procedures regarding removal.

What is the process for removing a board member?

The process for removing a board member, such as a treasurer or secretary, typically involves following the procedures outlined in the corporation's articles of incorporation and bylaws. Generally, a meeting must be called specifically for the purpose of removal, and notice must be given that removal is on the agenda. A majority vote from the board or shareholders may be required, depending on the corporation's rules.

What happens if cumulative voting is allowed?

If cumulative voting is allowed, a director cannot be removed unless the votes against their removal are fewer than the votes needed to elect them. This means that if enough shareholders vote against the removal, the director remains in their position. This provision is designed to protect minority shareholders and ensure that directors cannot be easily ousted without sufficient support.

Can shareholders remove a treasurer or secretary?

Yes, shareholders can remove a treasurer or secretary if they are also directors, provided that the articles of incorporation or bylaws allow it. In Indiana, shareholders have the right to remove directors with or without cause unless the governing documents state otherwise. The removal typically requires a vote at a meeting specifically called for that purpose.