Request By:
Richard S. Holt, Esq.
404 Security Trust Building
271 West Short Street
Lexington, Kentucky 40507
Opinion
Opinion By: Robert F. Stephens, Esq., Attorney General; Mark F. Armstrong, Esq., Assistant Attorney General
We are in receipt of your letter in which you ask us to reconsider our opinion in OAG 78-307 (April 26, 1978). In that opinion, we concluded that the directors of a business corporation could give their written consent pursuant to KRS 271A.220 1 in lieu of the annual meeting of directors.
In reaching that conclusion, we reasoned that even though KRS 271A.220 speaks of "any action required by [KRS Chapter 271A] to be taken at a meeting of the directors," and even though holding an annual meeting of directors is not a required action, the directors could give their written consent to voluntary action in lieu of holding a meeting, see OAG 78-307 (April 26, 1978), at p. 3, n. 1. In effect, we concluded that the statute should be given a liberal construction to apply to both required and voluntary actions of directors. While this conclusion is correct, we failed to consider the portion of the statute which explicitly makes it applicable to voluntary directors' actions; i.e., ". . . [A]ny action which may be taken at a meeting of the directors . . . may be taken without a meeting . . . [with written consent]." Thus, it was unnecessary and, indeed, improper 2 to interpret this statute to apply to voluntary actions when its wording makes it expressly applicable to such actions.
Accordingly, the language of OAG 78-307 (April 26, 1978) is modified to reflect that KRS 271A.220 expressly applies to actions of the directors which are either voluntarily undertaken or required to be taken, cf.
Gateway Const. Co. v. Wallbaum, Ky., 356 S.W.2d 247 (1962). The literal use of the written consent provisions of KRS 271A.220 in lieu of a meeting does not lead to an unreasonable result, see Model Bus. Corp. Act Ann. 2d § 844 P2 (1971); 8 Fletcher Cyc. Corp. (Perm Ed.) § 3749.
Summary: We are of the opinion that by its express terms, the written consent provisions of KRS 271A.220 may be used by the corporate directors to take voluntary actions which are not required by KRS Chapter 271A in lieu of a meeting of the directors. The language of OAG 78-307 (April 26, 1978) is modified accordingly. This opinion is limited to and extends no further than the expression of it in this Summary.
Footnotes
Footnotes
1 KRS 271A.220 provides:
"Unless otherwise provided by the articles of incorporation or bylaws, any action required by this chapter to be taken at a meeting of the directors of a corporation, or any action which may be taken at a meeting of the directors or of a committee, may be taken without a meeting if a consent in writing, setting forth the action so taken, shall be signed by all of the directors, or all of the members of the committee, as the case may be. Such consent shall have the same effect as a unanimous vote."
2 Griffin v. Bowling Green, Ky., 458 S.W.2d 456 (1970).