A close corporation shall have at least one director until an election by the corporation in its charter to have no board of directors becomes effective.

An election to have no board of directors becomes effective at the later of: The time that the organization meeting of directors and the issuance of at least one share of stock of the corporation are completed; The time the charter document in which the election is made becomes effective; or The time specified in the charter document in which the election is made. A director automatically ceases to be a director when an election to have no board of directors becomes effective.

If there is an election to have no board of directors: The stockholders may exercise all powers of directors, and the business and affairs of the corporation shall be managed under their direction; The stockholders of the corporation are responsible for taking any action required by law to be taken by the board of directors; Action by stockholders shall be taken by the voting of shares of stock as provided in this article; The stockholders may take any action for which this article otherwise would require both a resolution of directors and a vote of stockholders; By the affirmative vote of a majority of all the votes entitled to be cast, the stockholders may take any action for which this article otherwise would require a vote of a majority of the entire board of directors; A statement that the corporation is a close corporation which has no board of directors satisfies any requirement that an instrument filed with the Department contain a statement that a specified action was taken by the board of directors; The special liabilities imposed on directors by § 2-312(a) of this article and the provisions of §§ 2-312(b) and 2-410 of this article apply to the stockholders of the corporation and, for this purpose, “present” in § 2-410 of this article means present in person or by proxy; and A stockholder is not liable for any action taken as a result of a vote of the stockholders, unless he was entitled to vote on the action.