Zaozhuang Investor-Protection Case: Zhao and Qian resolution non-establishment

Reference Case: Zhao Mou and Qian Mou v. a Zaozhuang Company

A shareholders' resolution is not validly established where the company bypasses lawful convening procedures and instead drafts the outcome first and then seeks written signature confirmation. A shareholder's receipt of materials without voting or returning them cannot be deemed consent, and a same-day board resolution dependent on that defective shareholder vote also fails.

Holding

A shareholders' resolution is not validly established where the company bypasses lawful convening procedures and instead drafts the outcome first and then seeks written signature confirmation. A shareholder's receipt of materials without voting or returning them cannot be deemed consent, and a same-day board resolution dependent on that defective shareholder vote also fails.

Issues

shareholders' meeting convening procedureattempted substitution of signatures for a meetingconsequential non-establishment of board resolutions