Corporate Director Removal and Board-Vacancy Requirements in New York

At a glance

Requirements one by one

N.Y. Bus. Corp. Law § 102 defines an ordinary domestic corporation as a for-profit corporation formed under the BCL and defines director by function, regardless of whether the governing-board member is called a director, trustee, manager, governor, or something else. N.Y. Bus. Corp. Law § 103(a) excludes several specially governed corporations from the ordinary baseline.

BCL § 620 preserves written shareholder voting agreements and certain unanimous certificate-based management-control provisions, with a public-market cutoff.

Cause removal is the shareholder default

Under BCL § 706(a), shareholders may remove any or all directors for cause. No-cause removal is available only if the certificate or bylaws provide for it. BCL § 614(b) supplies the ordinary shareholder-vote rule: a majority of votes cast for or against the action, subject to a valid different rule in the BCL, certificate, or specific shareholder-adopted bylaw.

This page reports the procedure and does not decide whether alleged conduct constitutes cause.

Cumulative and special-electorate seats are protected

When cumulative voting applies, BCL § 706(c)(1) blocks removal if the votes against removal would be sufficient to elect the director cumulatively using the same total votes and an election of the entire board or the director's entire class.

If the certificate gives a class or series of shares, or voting bond holders, the right to elect a director, only that electorate may remove the director. Classification under § 704 does not independently convert no-cause removal into cause-only removal. Section 706 also states no separate removal rule for a director originally selected to fill a vacancy.

Governing documents can authorize board cause removal

The certificate or a specific shareholder-adopted bylaw may authorize board removal for cause. That power cannot extend to a director elected cumulatively or by a special share or bond electorate. Under BCL § 707 and § 708, ordinary board action uses a meeting with a majority-of-the-entire-board quorum and majority of those present, subject to permitted document variation, or unanimous written board consent unless restricted.

BCL § 706(d) separately allows the Attorney General or holders of ten percent of all outstanding shares, whether voting or not, to sue for a judgment removing a director for cause. The court may bar reelection for a period it fixes.

Article 7 states no general automatic-disqualification or automatic-cessation route for an ordinary director.

Shareholders may act at a meeting or by written consent

BCL § 605 requires 10-to-60-day meeting notice; special-meeting notice must state the purposes. BCL § 615 permits shareholder action without a meeting. The default is consent by all outstanding shares entitled to vote, but the certificate may authorize the minimum that would be required if every eligible share were present and voted at a meeting.

The necessary consents must be delivered within sixty days after the earliest dated consent, and a less-than-unanimous action requires prompt notice to nonconsenting shareholders. Section 706 states no director statement or hearing right and no separate delayed effective-time rule.

Article 7 supplies no general director-resignation mechanics

The current Article 7 index moves from election, classification, vacancies, and removal to quorum and board action without a director-resignation section. Section 705 covers vacancies arising for any reason but does not prescribe who receives a resignation, whether acceptance is required, a future effective date or event, withdrawal, or irrevocability. Those points must be resolved from the governing documents and actual notice rather than imported from officer rules or another state's statute.

Board-filled replacements usually serve to the next regular election

BCL § 705 covers a newly created directorship resulting from a board increase and a vacancy occurring for any reason, while assigning a different filler to a no-cause-removal vacancy. It states no exhaustive vacancy definition and no procedure for prefilling a future vacancy.

Unless shareholders elect the replacement, the replacement serves until the next shareholder meeting at which director elections are in the regular order of business and until a successor is elected and qualified. A shareholder- elected director instead follows the ordinary or classified term rules in BCL § 703 and § 704.

The vacancy's source and electorate determine the filler

For a newly created seat or ordinary vacancy other than no-cause removal, the board may fill the seat. If the directors then in office are below quorum, a majority of those directors may act. The certificate or bylaws may instead provide for shareholder filling, and the certificate may impose a greater board requirement.

A no-cause-removal vacancy defaults to shareholder-only filling unless the certificate or a specific shareholder-adopted bylaw authorizes the board. For a class or series seat that the board may fill, a majority of the remaining directors elected by that constituency acts; if none remains, § 705 returns to the ordinary or no-cause-removal route.

Article 7 states no separate officer, incorporator, or court appointment shortcut when every seat is vacant. The governing documents' shareholder-filler and meeting provisions therefore matter before assuming that someone may appoint a new board.

What trips people up

The cause rule and the vacancy-filler rule are separate. A certificate or bylaw authorizing no-cause removal does not by itself authorize the board to fill the resulting seat; § 705(b) requires a certificate provision or specific shareholder-adopted bylaw for that board-filling power.

A generic “majority of remaining directors” clause also misses the shareholder document override, no-cause-removal branch, class/series-seat route, and the replacement term ending at the next regular director-election meeting.

Common questions

May shareholders remove a director without cause?

Only if the certificate of incorporation or bylaws provide for no-cause removal. Otherwise BCL § 706 supplies cause removal.

Can the board remove a director?

Only for cause and only if the certificate or a specific bylaw adopted by the shareholders authorizes it. The board cannot use that route against a cumulative- voting director or one elected by a special share or bond electorate.

Do nonvoting shares count toward the judicial-removal standing threshold?

Yes. BCL § 706(d) authorizes holders of ten percent of outstanding shares to bring the action whether or not those shares are entitled to vote.

Statutes and sources

• N.Y. Bus. Corp. Law §§ 102-103, 605, 614-615, 620, and 703-708 — entity scope, meeting and consent procedure, shareholder vote, voting/control agreements, terms, classification, vacancy fillers, removal routes and protections, and board action. Official current Business Corporation Law pages