A right of first refusal gives the company and the other shareholders the opportunity to buy the shares before they are sold. This is how it works.
If a homeowner’s association is an Idaho nonprofit corporation, it must hold an annual meeting of its members.
Date and Time of Annual Meeting
The date and time of the annual meeting must be set in the bylaws. Idaho Code § 30-30-501. If the bylaws do not tell the homeowner’s association members when the annual meeting will be held, they violate Idaho Code.
Location of Annual Meeting
The annual meeting must be held in the place listed in the bylaws. Id. If no place is stated in the bylaws, then the meeting must be held at the “corporation’s principal office.” Id. It is typical for bylaws to state that the location of the annual meeting may be set by the directors.
Report on Financial Condition of Association
At the annual meeting, the president and “chief financial officer” (e.g., treasurer) must “report on the activities and financial condition of the corporation. Idaho Code § 30-30-501. This is usually done by way of a review of the financials of the homeowner’s association. Idaho Code does not say what exactly must be presented to the members.
The members must also act on matters that are “raised consistent with the notice requirements” of Idaho Code § 30-30-505. We discuss the notice of meetings in a separate blawg post. Click here to read it.
Failure to Hold an Annual Meeting
If the homeowner’s association fails to hold an annual meeting as fixed in the bylaws, it does not “affect the validity of any corporate action.” Idaho Code § 30-30-501.
With the growth of sites like airbnb.com, more and more homeowner's associations (HOAs) have owners who lease out their homes for days at a time. These short term rentals sometimes come with problems, like increased traffic, noise and damage to the common area.
In Idaho, a corporation may be administratively dissolved by the Idaho Secretary of State for three reasons:
Failure to deliver an annual report by the date it is due;
Failure to have a registered agent for 60 days; and
Failure to let the Secretary of State know within 60 days that its registered agent has changed or resigned.
Idaho Code § 30-21-601. When the Secretary of State determines that one of the reasons for dissolution exists, it must give notice to the corporation. The notice may be hand delivered or mailed to the corporation’s office or registered agent. Idaho Code § 30-21-602(a). The corporation has 60 days to cure the problem. Id. If it does not, it is administratively dissolved.
After being administratively dissolved, the corporation continues to exist but it may not do any business other than “wind up its activities and affairs and liquidate its assets in the manner provided in its organic law or to apply for reinstatement under section 30-21-603, Idaho Code.” Idaho Code § 30-21-602(c).
A corporation that is administratively dissolved may apply for reinstatement within 10 years of being administratively dissolved. Idaho Code § 30-21-603(a). To be reinstated, the corporation must file an application that states the name, address, date of the administrative dissolution, and that the the issue has issue has been resolved. Idaho Code § 30-21-603(b).
If any fees, taxes, interest, or penalties are due, they must be paid before the corporation will be reinstated. Idaho Code § 30-21-603(c).
When a corporation is reinstated, the date of reinstatement “relates back to and takes effect as of the effective date of the administrative dissolution.” Idaho Code § 30-21-603(d). The corporation is treated as if it was never administratively dissolved. Id.
Deadlock in a closely held corporation stops a business in its tracks. Deadlock happens when a key decision can not be made because there is not enough votes to make the decision. This occurs most often in two situations.
Shareholders of closely held corporations should consider whether additional shares can be sold. A corporation is free to create and sell more stock unless there is something in writing saying it may not.
Shares in a closely held corporation are typically not marketable. Very few investors want to become a shareholder in a closely held corporation. This creates the problem of determining how a shareholder can get out of a closely held company at a fair price. One way to deal with this problem is a put right along with a right of first refusal.
Idaho Code allows the shareholders of a corporation to sign a shareholder agreement. Idaho Code § 30-29-732. A shareholder agreement may address many different aspects of corporate governance.
On February 22, 2018, the Supreme Court declined to take up one of the key DACA cases before it has worked its way through the lower courts of appeals. The Trump administration had requested that the Supreme Court take the unusual step of permitting their appeal of a January 9, 2018 federal judge ruling, requiring the government to keep DACA open for renewals, to bypass the lower courts of appeals and proceed directly to the Supreme Court.
Cap season is upon us. What is cap season exactly? It’s the time of year when employers seeking to hire foreign professionals for “specialty occupations” prepare and send their petitions to USCIS for a limited number of H-1B visas. There is currently an annual cap of 65,000 regular H-1B visas and an additional 20,000 H-1B visas for individuals with U.S. master’s or doctorate degrees.