Ordinary meeting of shareholders of a limited liability company – how should you prepare for it?
Become acquainted with the financial statement before the meeting
The company is obliged to make available to all shareholders 15 days before the meeting at the latest the financial statement, the management board’s report on the operations and the opinion of the statutory auditor, if the statement is subject to audit. For a minority shareholder that has no ongoing impact on the company’s operations, it is a good time to analyse the company’s financial situation and to prepare for the ordinary meeting.
Before the meeting, the shareholder should become acquainted with these documents and assess the activities performed by the management board in the given year. If the shareholder has any doubts as to any information contained in the documents, it has the right to obtain explanations within the ‘examination’ of these documents, which is a compulsory element of each ordinary meeting of shareholders.
Check whether the meeting has been correctly convened
The invitation to the meeting of shareholders should be sent at least 2 weeks before its scheduled date. Convening the meeting in violation of the above-indicated deadline may constitute grounds for challenging resolutions adopted at this meeting.
The shareholder should also carefully read the agenda included in the invitation – without the consent of all shareholders, the meeting will not be allowed to adopt any resolution not included in the agenda from this invitation.
A similarly important element is the place of the meeting. If the meeting is convened outside the city/town in which the company’s registered office is located or outside any other city/town directly indicated in the articles of association – all shareholders must express their written consent to holding the meeting at the location other than the registered office.
Become acquainted with the requirements of the articles of association
It is worth analysing the provisions of the articles of association concerning the adoption of resolutions at the meeting of shareholders. In order to effectively adopt a specific resolution, the articles of association or the provisions may require a quorum – i.e. a specific number of shareholders present at the meeting. In addition, resolutions do not always have to be adopted by an absolute majority of votes – it should be verified whether the articles of association provide for a different majority, or even the consent of a specific shareholder or all shareholders to adopt a certain resolution.
Don’t forget to raise an objection
If the shareholder does not agree with the resolution adopted, it may challenge it. To challenge a resolution, it is not enough to vote against it – it is also necessary to raise an objection once it has been made. The shareholder that is not aware of the necessity to raise an objection may lose the opportunity to challenge the resolution adopted.
A professional representative may help
In the light of the above consideration, it is a good idea to ask for the assistance of a professional representative who may replace the shareholder at the ordinary meeting or appear together with them. They will be able to take care of the interests of the company’s shareholder with appropriate distance and without unnecessary emotions, and focus on noticing potential errors in the course of the meeting – especially if there is a conflict between the shareholders in the company.