Ensure a legally compliant general meeting and appoint a competent chairperson
The general meeting is a statutory governing body in a limited liability company, and the selection of its chairperson is essential for the success of the meeting
The general meeting serves as the decision-making body where shareholders convene to decide on company matters in accordance with the Limited Liability Companies Act and the company’s Articles of Association, taking other applicable laws into account. During the general meeting, shareholders elect the board of directors and auditors, approve the financial statements, grant discharge of liability to the board and the managing director, and address other matters within the general meeting’s competence as specified in the notice of general meeting. The essential matters to be handled at the general meeting are stipulated in the Limited Liability Companies Act.
While the general meeting is the highest decision-making body in the company, it does not constitute the company’s executive management. The meeting must be held within the timeframe prescribed by law or the Articles of Association, typically within six months from the end of the financial year. The general meeting serves as a forum where shareholders receive information on company affairs and exercise their rights to decide on matters within the meeting’s authority.
The board of directors may delegate matters within its or the managing director’s competence to the general meeting for decision-making. Unanimous shareholders may also resolve on matters typically within the board’s authority without a formal board decision. The agenda items must be specified in the notice of general meeting.
Timing of the general meeting
Every limited liability company must hold its general meeting no later than six months after the end of the financial year, unless a shorter period is specified in the Articles of Association. It is advisable for the board to determine the meeting date well in advance.
Advance planning benefits the process, including the timely recruitment of an external chairperson and the preparation of board proposals. In some cases, notices of general meeting are sent on the last permissible day.
Conducting the general meeting
A general meeting may be held physically at the company’s registered office location or remotely if permitted by the Articles of Association. A hybrid meeting format may also be used.
A general meeting may be avoided by a unanimous shareholder decision. In such cases, shareholders draft and sign a decision record, provided unanimity is maintained.
Duties of the general meeting
A limited liability company follows a governance structure based on the Limited Liability Companies Act and the Articles of Association, which includes the general meeting, the board of directors, and, in many cases, a managing director. The general meeting is the highest decision-making body, while the board serves as the executive management. The general meeting cannot override the board’s authority unless unanimous but can replace board members wholly or partially. The board may also refer matters under its competence to the general meeting for decision-making.
The board is responsible for preparing and convening the general meeting.
Mandatory matters for the general meeting agenda
According to the Limited Liability Companies Act, the general meeting must address the following matters:
- Presentation of the financial statements, annual report, and audit report.
- Resolution on approval of the financial statements and discharge of liability for the board and the managing director.
- Determination of the number and election of board members and their deputies, within the limits set by the Articles of Association.
- Appointment of auditors and their deputies, or responsible auditors in case of an audit firm.
- Decision on auditors’ remuneration.
- Decision on board members’ remuneration and other compensation.
- Other matters specified in the meeting notice, some of which may be prescribed by the Articles of Association.
- Non-decisionary discussions on other matters.
Quorum for the general meeting
A general meeting is validly convened when the notice of general meeting is delivered to shareholders listed in the shareholder register at their known addresses, in compliance with the Limited Liability Companies Act and the Articles of Association. The essential requirement is that the notice is not sent too late. A single shareholder or their representative is sufficient for quorum, unless the Articles of Association exceptionally stipulate otherwise.
Notice to shareholders
Under the Limited Liability Companies Act, shareholders are entitled to receive the notice of general meeting at least one week prior to the meeting, unless the Articles of Association specify otherwise. The notice must be delivered in accordance with the Articles of Association, typically in writing or via email, and must include the time, location, and agenda items of the meeting.
Right to participate in the general meeting
All shareholders or their authorized representatives have the right to participate in the general meeting. If required by the Articles of Association, shareholders must notify the company of their participation within the timeframe specified in the notice of general meeting. Otherwise, failure to pre-register does not prevent attendance.
A shareholder may participate personally or authorize a representative with a written proxy. Shareholders also have the right to ask questions, receive information from the board or managing director, express opinions, and make proposals during the meeting.
Minutes of the general meeting
The minutes must record the meeting date, location, attendees, and decisions made, including any voting results. The minutes must be signed by the chairperson and the designated verifiers.
The meeting minutes serve as official proof of the decisions made and are accessible to shareholders as part of the company’s transparency.
Challenging a general meeting decision
A general meeting decision may only be annulled through a new general meeting resolution or a court ruling. A decision may be void if it lacks legal effect or is invalid.
If a general meeting decision violates the law or the Articles of Association, it can be challenged in court. Additionally, a court may invalidate decisions based on shareholder rights violations or those contrary to general legal principles.
The board must not execute an unlawful general meeting decision.
Preparing for a general meeting?
We ensure your general meeting complies with the Limited Liability Companies Act, other relevant legislation, and the Articles of Association. Our services provide a seamless and cost-effective experience.
Our services as general meeting chairperson include:
- Ensuring compliance with the Limited Liability Companies Act, other legislation, and the Articles of Association.
- Drafting the notice of general meeting and a script for the chairperson.
- Acting as the chairperson and/or secretary of the general meeting.
- Preparing a draft and final version of the meeting minutes.
- Assisting with drafting announcements related to the general meeting.
- Handling necessary registrations.
- Providing legal consultation on general meeting matters and decisions.
