Characteristics of the general meeting

Characteristics of the general meeting

The General Meeting is the meeting of shareholders at which the corporate will is formed through the adoption of resolutions within the scope of its competences. It is a necessary body in capital companies.

Types of General Meetings

There are several types of meetings:

1. Ordinary and extraordinary meetings (art. 163 LSC). Ordinary meetings are held within the first six months of each year, to approve the management of the company, the accounts for the previous year and to decide on the distribution of profits (Art. 164 LSC). Extraordinary meetings are the rest of the non-ordinary meetings (art. 165 LSC).
2. General meetings and special meetings. The former are the ordinary meetings, and the special meetings are those that bring together exclusively the shareholders belonging to a certain class of shares or holdings.
3. Previously called meetings and universal meetings. Meetings are normally convened in advance in accordance with the legal or statutory procedure. However, the convening regime may be omitted when at a given time, whether all the capital stock is present or represented, all the attending shareholders unanimously agree to hold the meeting and set the agenda (Art. 178 LSC).

Rules to convene a General Meeting

However, the General Meeting is not only a “corporate body”, but also a procedure for the corporate body to validly adopt corporate resolutions. Normally, the General Meeting must be previously convened in accordance with certain rules:

1. It will be called by the administrators and, if applicable, by the liquidators of the company. This is the general rule, which is excepted in the cases of Article 169 LSC: (i) when the ordinary meeting is not called by the administrators within the legal or statutory period, it may be called, at the request of any shareholder, by the Counsel for the Administration of Justice or by the Mercantile Registrar of the registered office; or (ii) when the administrators do not respond in a timely manner to the request for a meeting called by the minority, it may also be called by the Counsel for the Administration of Justice or by the Mercantile Registrar of the registered office.
2. Depending on whether the meeting is ordinary or extraordinary, the directors have the “duty” to call the meeting or the “power” to call it (art. 167 LSC). In particular, “the directors must call the general meeting when requested to do so by one or more shareholders representing at least five percent of the share capital, stating in the request the matters to be discussed” (art. 168.I LSC).
3. The convening of the General Meeting is subject to a series of mandatory requirements, the non-observance of which compromises its legality and the validity of the resolutions that may be finally adopted by the body.

• • Form. The call must be made public by means of an announcement published on the company’s website (art. 11 bis LSC) or, as the case may be, in the BORME and in one of the newspapers with the largest circulation in the province of the company’s registered office (art. 173.1 LSC). The articles of association may, however, establish alternative systems of notice.
  • Content. The notice of meeting has a mandatory minimum content: the agenda, which has a dual informative function and delimits the competence of the meeting. In corporations, the agenda set by the directors may be supplemented or integrated by other matters at the request of shareholders holding 5% of the capital (Art. 172 LSC).
  • Time. It must be held at least one month in advance of the date scheduled for the meeting: (i) in the case of corporations, one month in advance (art. 176.1 LSC); (ii) in the case of limited liability companies, fifteen days in advance (art. 176.2 LSC), except in the case of structural modifications, in which case, the period is increased to one month.
  • Place. The general meeting will be held in the municipal district of the registered office, even when the notice omits the place of the meeting. Although the bylaws may contain a different provision (art. 175 LSC).

4. Waiver of notice (universal meeting). The universal meeting implies a waiver of the notice of meeting. In order for a universal meeting to be validly held, the entire share capital must be in attendance and the attendees must unanimously accept both the holding of the meeting and the matters to be discussed (art. 178.1 LSC) and, although not expressly stated in the law, they must expressly accept the agenda.