Corporate Director Removal and Board-Vacancy Requirements in Mississippi

At a glance

Requirements one by one

Mississippi's ordinary rules appear in the Mississippi Business Corporation Act, Miss. Code § 79-4-1.01.

Removal is meeting-only and ordinarily does not require cause

Miss. Code § 79-4-8.08 permits shareholders to remove one or more directors with or without cause unless the articles make removal cause-only. Without cumulative voting, votes cast to remove must exceed votes cast not to remove.

Only the voting group that elected a director may remove that director. If cumulative voting applies, election-sufficient votes against removal protect the seat. Miss. Code §§ 79-4-8.04 and 79-4-8.06 authorize class or series seats and two- or three-group staggering, but classification alone does not add a cause rule.

Section 79-4-8.08(d) permits removal only at a meeting called for that purpose and requires the notice to identify removal. Miss. Code §§ 79-4-7.02 and 79-4-7.05 allow the board, an articles- or bylaw-authorized caller, or holders of ten percent of votes on the issue to trigger a special meeting and set ordinary notice at ten to sixty days.

A qualifying shareholder agreement can set a different route

Miss. Code § 79-4-7.32 recognizes an agreement that may establish directors, their terms, and their manner of selection or removal even when inconsistent with the Act. The agreement must be in the articles or bylaws and approved by all then-shareholders, or signed by all then-shareholders in a writing made known to the corporation.

That special agreement ceases when the corporation becomes public. Its validity and effect depend on satisfying § 79-4-7.32, not merely on calling a document a shareholder agreement.

Judicial removal requires conduct and best-interest findings

Under Miss. Code § 79-4-8.09, the corporation or shareholders holding at least ten percent of the outstanding shares of any class may seek judicial removal. The court must find fraudulent or dishonest conduct or gross abuse of authority or discretion, plus that removal is in the corporation's best interest.

The court may prescribe a reelection bar, and shareholder plaintiffs must make the corporation a defendant. The Act states no ordinary board-removal or automatic-disqualification route.

Resignation may use a later date, but not a future event

Miss. Code § 79-4-8.07 requires written notice to the board, its chair, or the corporate secretary. Resignation is effective on delivery unless it specifies a later effective date. The section states no future-event, acceptance, withdrawal, or irrevocability rule.

Every vacancy filler receives a next-election term

Unless the articles provide otherwise, Miss. Code § 79-4-8.10 authorizes the shareholders or board to fill a vacancy, including a newly created seat. If the remaining directors are below quorum, an affirmative majority of all remaining directors may fill it.

For a voting-group seat, only that group's shareholders or its elected directors may fill the vacancy. A future vacancy may be filled early, but the successor waits to take office.

Under Miss. Code § 79-4-8.05(d), every vacancy fill expires at the next shareholder meeting at which directors are elected. The predecessor's unexpired term is not the default. If no directors remain, shareholders are still an express filler, and § 79-4-7.02 supplies a ten-percent special-meeting demand.

What trips people up

Removal and vacancy filling use different vote denominators. Removal without cumulative voting compares votes cast for and against the director. A below- quorum board vacancy fill instead requires an affirmative majority of all remaining directors.

The replacement term also does not preserve the removed director's unexpired term. Section 79-4-8.05(d) ends every vacancy fill at the next shareholder meeting at which directors are elected.

Common questions

Can Mississippi shareholders remove a director by written consent?

Not under the ordinary removal provision. Section 79-4-8.08(d) says removal occurs only at a purpose-called meeting whose notice states removal. A qualifying § 79-4-7.32 shareholder agreement may set a different removal manner.

Can a board below quorum fill a vacancy?

Yes. Section 79-4-8.10(a)(3) requires the affirmative vote of a majority of all directors remaining in office.

Which court hears a judicial-removal case?

Section 79-4-8.09 uses the chancery court where the principal office is located, or the First Judicial District of Hinds County Chancery Court if there is no principal office in Mississippi.

Statutes and sources

• Miss. Code §§ 79-4-1.01, 79-4-7.02, 79-4-7.05, and 79-4-7.32. Name the Act and govern special-meeting callers, notice, and the qualifying shareholder agreement.
• Miss. Code §§ 79-4-8.04 to 79-4-8.10. Govern class seats, classification, terms, resignation, shareholder and judicial removal, and vacancies.