What is a quorum for a shareholders’ meeting?

A majority of the shares entitled to vote constitutes a quorum at a meeting of the shareholders. See Cal. Corp. Code § 602. That number can be lowered in the corporation’s articles of incorporation, but a quorum cannot consist of less than one-third of the number of shares entitled to vote at the meeting. Only in a statutory close corporation can a number greater than a majority be required to constitute a quorum. Once a quorum is present, the shareholders may continue to transact business even if enough shareholders withdraw from the meeting to leave less than a quorum, so long as any action taken (other than adjournment) is approved by at least a majority of the shares required to constitute a quorum. Otherwise, no business can be transacted in the absence of a quorum, except for adjournment.