Management of the Company, Meetings and Voting. Article 3 of the model agreements deals with management of the company, meetings and voting. The model company agreement for a company managed by managers details the number, qualifications and methods for selecting and removing managers. The BOC provides that directors of a corporation are elected at annual shareholder meetings of the corporation69 and serve for terms starting and ending on the dates of the annual meetings70 unless provided otherwise in the corporation’s certificate of formation or bylaws.71 Consistent with the more informal governance permitted for limited liability companies, the BOC does not call for annual elections of managers and states that a manager serves for the term elected (assuming the election specified a term) or until the manager’s successor is elected or until the manager resigns, is removed or dies.72 Sometimes company agreements for limited liability companies emulate the corporate model and call for annual elections of managers. The model agreement for a manager-managed company presented with this paper adopts a more informal approach and provides that managers will serve until they resign, are removed or die and that, unless a term is specified upon a manager’s selection, managers do not serve for a fixed term.73 The model agreement specifies that manager vacancies may be filled by a vote of the members.74 In the past, it was important to specify that members had the right to fill manager vacancies if no term was specified for managers because the BOC provided as a default rule that managers filled manager vacancies unless the vacancy resulted from an increase in the number of managers or the position was for a manager elected under a provision of the company agreement 67 TEX. BUS. & COM. CODE XXX. § 9.102(a)(49). 68 Section 2.11 of Appendix A and Appendix B. 69 TEX. BUS. ORGS. CODE XXX. § 21.405(a). 70 TEX. BUS. ORGS. CODE XXX. § 21.407. 71 TEX. BUS. ORGS. CODE XXX. § 21.408. 72 TEX. BUS. ORGS. CODE XXX. § 101.303. 73 Section 3.3 of Appendix A. 74 Section 3.5 of Appendix A. permitting a class or group of members to elect the manager.75 If a term was not specified, then a vacancy was the only situation in which managers would be elected, and the default rule essentially created a self- perpetuating set of managers. In 2017, BOC § 101.305 was amended to provide that a vacancy in the position of a manager may generally be filled either by a majority of the remaining managers (regardless of whether the remaining managers...
Management of the Company, Meetings and Voting
