MBE Rules · Business Associations
Proxies
Cal. Corp. Code § 705
The rule
A proxy is an agency revocable by later proxy, written revocation, or attendance, valid at most 11 months unless stated; proxies coupled with an interest are irrevocable.
In plain English
A proxy allows a shareholder to authorize someone else to vote on their behalf at a corporate meeting. Proxies can be revoked by a later proxy, a written notice of revocation, or if the shareholder attends the meeting, but they generally expire after 11 months unless specified otherwise. Proxies that are tied to a specific interest in the company cannot be revoked easily.
Worked example
Jane is a shareholder in XYZ Corp and gives her friend Tom a proxy to vote for her at the annual meeting. Later, Jane decides to revoke the proxy by sending a written notice to the company, and she attends the meeting herself. As a result, Tom's proxy is no longer valid, and Jane can vote directly.
Memory hook
Proxies are like voting passes: they can be revoked, but some are locked in by interest.
The trap
Exams often present scenarios where students must identify whether a proxy has been effectively revoked, leading to confusion about the nuances of revocation methods.
How examiners test it
Questions typically involve a fact pattern where multiple proxies are issued, and students must determine the validity of each based on revocation rules and the nature of the proxies.
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