Holding the Annual General Meeting of Shareholders
The procedure for holding an annual General Meeting is mandatory for business entities. Such meetings are used to analyze and solve the most important issues related to the company’s activities.
It is necessary in order to study the most significant issues in the activities of the enterprise.
Preparation, convocation and holding of the General Meeting of Participants or Shareholders consists of many nuances and stages.
The deadline for holding the Annual General Meeting is March 31st. The specific date is written in the organization’s charter.
ANNUAL GENERAL MEETING OF SHAREHOLDERS LLC
In order to avoid any difficulties during the General Meetings of Participants, it is necessary to specifically and in detail regulate this issue in the local legal acts of the company and the charter.
The person in charge prepares the information provided for by law, which will be presented at the General Meeting to the participants.
Before the meeting starts, all persons entitled to vote must be registered, otherwise they will not be able to vote.
Registration is understood as checking documents and the right to vote of the subject and adding it to the list of persons present.
Unless otherwise stated in the charter, the LLC participant has as many votes as is the size of his share in the authorized capital of the organization.
At the end of the voting, the votes are counted and a decision is made based on this.
In cases where the LLC consists of one participant, then there is no need to hold an annual General Meeting, however, the decisions that are considered at the annual meetings, the participant still needs to make.
The result of the General Meeting of Participants is the minutes. It must specify in detail all the issues that were discussed at the meeting.
ANNUAL GENERAL MEETING OF CJSC MEMBERS
One of the most important rights of a shareholder is his ability to take part in the management of such a joint stock company. This right is exercised by voting at General Meetings of Shareholders.
CJSC, like any other business entity, is obliged to hold an annual General Meeting of Shareholders, at which the results for the past reporting year will be summed up.
There are cases when a CJSC is not able to hold an annual General Meeting, since there are not enough people present for this. According to the legislation, the meeting must be attended by persons holding in aggregate at least half of the shares, if the charter does not increase this percentage.
In such a situation, a repeated meeting will be held, for which the presence of persons with only 30 percent of the votes from all others will be sufficient.
Annual General Meeting of CJSC is held in the same manner as in LLC. A special feature is that the list of persons who have the right to participate in the General Meeting is formed on the basis of the register of shareholders made as of the date established by the authorized body of the joint stock company.
The date of drawing up the register of shareholders, on the basis of which the list of persons entitled to vote at the General Meeting of Shareholders is formed, cannot be set earlier than the date of such a meeting is adopted.
Such a list contains the full name of each required person, information from his identity documents, information on the number of shares owned by him.
As a rule, the number of shares is equal to the number of votes a shareholder has.
If a CJSC has more than 100 shareholders, then voting can only take place using ballots.
CONVOCATION OF ANNUAL GENERAL MEETING
The convocation of the annual General Meeting of Participants or Shareholders is carried out by the body that is endowed with such a right by the charter. As a rule, such is a member or shareholder of a business company, director or supervisory board, if the charter gives him such powers.
FORMS OF HOLDING ANNUAL GENERAL MEETING OF PARTICIPANTS
Issues that must be considered at the Annual General Meeting, according to the law, can be considered only in person.
For the face-to-face form of holding the General Meeting of Participants, it is characteristic to gather all the necessary persons in one place, where decisions are made jointly. At such a meeting, the subjects are registered.
The identity of the arriving person is established. At this stage, documents are provided confirming the authority to participate in the decision-making of the meeting.
At the end of the General Meeting in person, a list of those present is drawn up, their signatures are affixed.
As a rule, the registration is carried out by the person who was responsible for convening the General Meeting of Participants, however, there is no specific provision in this regard in the legislation.
CHAIRMAN OF THE GENERAL MEETING
The choice of the person who will become the chairman of the General Meeting takes place for a period and in the manner prescribed by the charter or the meeting itself.
Such a chairman can be either a person who exercises the powers of the sole executive body, as well as the chairman of a collegial executive body of a legal entity or a supervisory board.
The duties of the chairman are organizational issues of holding the General Meeting of Participants, for example, forming the agenda, summing up the results, signing the minutes, and so on. Another special competence of the chairman of the meeting is not enshrined in legislation.
His function at the General Meeting of Participants, regardless of who he is by status, is to conduct the meeting, technical functions.
Between meetings, the chairman does not have any rights or duties associated with this status. Except for notifications about decisions of interested parties made at meetings.
ISSUES THAT ARE CONSIDERED AT THE ANNUAL GENERAL MEETING
At the Annual General Meeting, issues are considered that can be divided into 2 types: mandatory and optional. Required are questions regarding the following:
- Annual reports, including information from the book of income and expenses of the organization;
- Distribution of profits and coverage of company losses;
- The choice of persons who will enter the supervisory board, if this body is enshrined in the charter of the company;
- Selection of the Audit Commission.
The first two points are subject to the conclusion of the audit commission and the auditor. If, after paying taxes and other payments, the company has a part of the profit and its distribution has not been established in advance, it is divided proportionally among all its members. It is worth noting in which cases a society is not entitled to distribute profits between its members:
- Until the enterprise pays in full for its entire statutory fund;
- Before covering the actual value of its share;
- If the organization is characterized by insolvency in accordance with bankruptcy legislation or if the previously specified character is acquired by it as a result of such payment;
- If the value of the company’s net assets is less than the amount of its authorized capital and reserve funds or will become it after payment.
Optional issues for the annual General Meeting may be any issues requiring resolution that are within the competence of the General Meeting. For example, the establishment of the amount of remuneration and (or) compensation of expenses to the composition of the supervisory board and the audit commission of a legal entity for their work.
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