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Can shareholders remove a director in an Indiana corporation?

Can shareholders remove a director in an Indiana corporation?

Q: Can a director be removed without cause in Indiana?

Yes, under Indiana law, directors can be removed with or without cause unless the articles of incorporation specify otherwise. This means shareholders are not required to provide a reason for the removal, as stated in Indiana Code (IC 23-1-33-8).

Full question:

Followup question on #16375: In an Indiana corporation where the Articles are silent on removing directors, and there are no special voting groups or cumulative voting, can the shareholders remove a director? The question is about INDIANA law.

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

Answer:

Under Indiana law, shareholders can remove a director unless the articles of incorporation state otherwise. According to Indiana Code (IC 23-1-33-8), directors may be removed with or without cause. If a director was elected by a specific voting group, only that group can vote on their removal. If cumulative voting is not allowed, a director can be removed if more votes are cast in favor of removal than against it. Additionally, the removal must occur at a meeting specifically called for that purpose, and the notice for the meeting must indicate 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

What is the process for removing a director in an Indiana corporation?

To remove a director in an Indiana corporation, shareholders must hold a meeting specifically for this purpose. The notice for the meeting must clearly state that the removal of the director is on the agenda. During the meeting, a majority of votes must be cast in favor of removal for it to be effective. This process is outlined in Indiana Code (IC 23-1-33-8).

Can a director be removed without cause in Indiana?

Are there any voting requirements for removing a director in Indiana?

Yes, to remove a director in Indiana, more votes must be cast in favor of removal than against it. If the director was elected by a specific voting group, only that group can vote on their removal. This ensures that the voting process is fair and aligned with the interests of the shareholders involved, as per Indiana Code (IC 23-1-33-8).

What happens if the articles of incorporation allow for director removal?

If the articles of incorporation of an Indiana corporation allow for specific procedures or conditions regarding the removal of directors, those provisions must be followed. This could include requirements for cause, special voting thresholds, or other stipulations that differ from the general rules provided in Indiana Code (IC 23-1-33-8).