Meetings of members: Overview, definition, and example
What are meetings of members?
Meetings of members refer to formal gatherings of the members or shareholders of a company, partnership, or other entity, where they come together to discuss and make decisions on key business matters. These meetings are typically governed by the company’s bylaws or operating agreement and can occur regularly (such as annually) or on an as-needed basis. In member-based organizations, these meetings allow the members to vote on important issues such as electing directors, approving major business decisions, or making changes to the organization's structure.
For example, in a limited liability company (LLC), the members might meet to discuss the company’s performance, approve new business initiatives, or amend the operating agreement.
Why are meetings of members important?
Meetings of members are important because they provide a formal platform for decision-making and allow members to express their opinions on the direction of the company. These meetings are also a way to ensure transparency, accountability, and compliance with governance rules. By gathering all members together, the business can make collective decisions and address any concerns, helping the company run smoothly and in alignment with the members’ interests.
For SMBs, having regular and well-organized meetings of members ensures that business decisions are made collaboratively and that the company operates in a structured and legally compliant manner.
Understanding meetings of members through an example
Imagine your small business operates as a partnership with several partners. The partnership agreement requires annual meetings of members to review the company’s financial performance, discuss any changes to the partnership’s structure, and decide on the distribution of profits. During these meetings, all partners have a chance to voice their opinions, vote on decisions, and approve the next steps for the business.
In another example, if your business is an LLC, the members may hold quarterly meetings to discuss strategic direction, investments, or significant financial decisions. These meetings ensure that all members are informed and involved in key business decisions.
An example of meetings of members in action
Here’s how meetings of members might be referenced in an operating agreement or business contract:
“The company shall hold an annual meeting of members to discuss the performance of the business, approve financial statements, elect directors, and make any necessary amendments to the operating agreement. Additional meetings may be called by the majority of members as needed.”
Conclusion
Meetings of members are formal gatherings where the members or shareholders of a business meet to make collective decisions, review business performance, and discuss key issues. For SMBs, holding regular meetings ensures transparency, compliance with governance rules, and that all members have a voice in shaping the company’s future. Whether annual or as-needed, these meetings are essential for maintaining a structured and efficient business operation.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.