Constitution of the General Meeting
For the constitution of the General Meeting, the law disciplines such important aspects as attendance, representation and voting of members at the meeting.
- Attendance. The partners, by the mere fact of being partners, have the right to attend the meetings of their company. In order to contain the attendance of large masses of shareholders, in public limited companies (not in limited companies: art. 179.1 LSC) the right to attend may be limited by means of a provision in the articles of association requiring the holding of a minimum number of shares, which may never exceed one per thousand of the share capital. In addition to the shareholders’ right to attend, there is also the duty of attendance of the directors and, if the bylaws so require, “of directors, managers, technicians and other persons having an interest in the proper conduct of the company’s affairs”.
- Representation. Shareholders may exercise their participation rights – attendance and voting – in person (including “telematic”) or by written representation:
- In corporations, representation may be conferred, always on a special basis for each meeting, in favor of any person, unless the bylaws provide for any limitation;
- In limited liability companies, however, the partners may be represented only by another partner, unless the bylaws authorize them to be represented by other persons. In both these and other companies, the shareholders are entitled to grant a proxy to a family member or to a general proxy, the public request for representation (which is addressed to more than three shareholders) being subject to the requirement that the proxy document includes the agenda and the express request for instructions for the exercise of voting rights, as well as the direction in which the representative will vote in the event that no instructions are given.
- Voting. Voting is a necessary element in the procedure of corporate resolutions. Unless the shares or participation have been issued or created without voting, or have the vote suspended, the vote is a right of the shareholder. The measure of attribution of the right responds to the rule of proportionality with the shareholding of the shareholder, being prohibited the issuance of shares that directly or indirectly alter the proportionality between the nominal value and the voting right, but not the shares with plural voting. In any case, the vote may not be cast in a situation of conflict of interest between the company and the shareholder.
In the constitution phase of the General Meeting, the Presiding Board and the list of attendees are of paramount importance. The presiding officers are the chairman and the secretary of the meeting, who will be those of the Board of Directors or, failing that, those appointed by the shareholders present at the beginning of the meeting.
To constitute the quorums to validate the General Meeting
The list of attendees shall be drawn up by stating the nature or representation of each shareholder and the number of holdings or shares owned or owned by them or by others, and the quorum and voting majorities shall be computed on this list.
In order for the General Meeting to be validly constituted, the legally established quorums must be established, when there are no other quorums reinforced in the bylaws:
- In the case of corporations, at first call, 25% of the capital stock for ordinary resolutions and 50% for 50 percent for extraordinary resolutions, and at second call, none for ordinary resolutions and 25% of the capital stock for extraordinary resolutions;
- In a limited liability company, no quorums are established for the general meeting, which may only be held when it is attended by shareholders who hold the number of votes required by law to adopt the resolution in question.
Once the quorum has been verified by the presiding board, the chairman may declare the meeting validly constituted, announce the agenda and begin the procedure for passing resolutions.
Although the meeting will take place in one session, art. 195 LSC authorizes that it may be extended in several sessions over one or more consecutive days, subject to a resolution of the meeting itself at the proposal of the directors or at the request of a number of shareholders representing one quarter of the capital present. Notwithstanding the existence of several sessions, the General Meeting shall be considered as a single meeting, and a single set of minutes shall be drawn up for all the sessions.
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