Question:
What happens if they do not?
Answers:
First let's assume that this is not a public company. Theoretically, any corporation should have at least an annual shareholders' meeting, election of directors, and a meeting of the board of directors. How often meetings and elections are to be held should be described in the bylaws. That does not mean you have to have a formal meeting. As long as shareholders know what is going on, many small private corporations simply write a set of minutes to keep in their records. That is because the shareholders are often managing the company and act as directors, and formal meeting and votes would not change anything.
However, if the small company has shareholders not involved in the business, the directors and managers can protect themselves from legal action by calling a meeting every year. This can still be informal, for example by sending a newsletter informing shareholders of what is going on and voting for directors, even if the voting is by email. It is always a good idea to have a complete set of records to show that the company is satisfying its bylaws.
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