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Organize the shareholders’ meeting – this must be taken into account

Anyone who sets up a company as a partner will regularly hold a meeting of all shareholders to discuss various company issues. As a specialist lawyer for commercial and [link text=“Corporate Law Munich” id=“74″], I would like to inform you in more detail about the shareholders’ meeting and tell you what you should pay attention to during it.

##Shareholders' meeting - when does it take place?

The partnership agreement can specify how often all shareholders should meet for meetings. This could be the case once a month, for example, to exchange information about the current status of the company. Of course, in urgent cases, a shareholders' meeting can also take place regardless of the regulation. A so-called extraordinary meeting usually takes place when important things need to be discussed or quick decisions need to be made.

Extraordinary meetings cannot be called by everyone, but only by the people listed in the shareholders' agreement. If no one in particular has been appointed, it is usually the responsibility of the managing director to convene the meeting.

###Expiration of the session

If not already determined, the chair of the meeting and the person taking the minutes will be appointed first. In addition, the quorum must be determined, which is usually regulated in the partnership agreement. The meeting is considered to have a quorum if at least half of the shareholders are present to be able to pass a shareholder resolution. However, the partnership agreement can also specify individually how many participants the shareholders' meeting is considered to have a quorum.

As a partner, you have the opportunity to appoint a representative in your absence. This person is authorized to take part in votes regarding shareholder resolutions in place of the missing shareholder. A power of attorney is urgently required. Simply leaving a note about the non-appearance and about the responsible representative is not permitted under any circumstances. Once the organizational points have been dealt with, the meeting can be individually designed and the agenda items can be dealt with.

###Type of vote

The next steps to be taken or certain resolutions often have to be made at a shareholders' meeting. Whether a shareholder resolution is voted verbally or in writing, whether a simple majority is sufficient or a certain percentage is required, such as a 2/3 majority, this should be expressly stipulated in the partnership agreement. If no agreement can be reached by the specified majority, the simple majority counts.

###Minutes of the shareholders' meeting

Especially in disputes, what was discussed orally can only be proven if it is recorded in writing. Therefore, ensure that minutes are drawn up at every shareholder meeting. This is not required by law, but can be useful as later “evidence” in conflicts. It is also important to know which matter was discussed in which of the previous meetings and which shareholders were present at that time.

Data to be noted in the protocol:

– Location and time information
– Start and end of the meeting
– Participating shareholders
– Voting results and number of votes
– Instructions from shareholders to the managing directors (exact wording and, if applicable, deadlines set)
– Content of the shareholder resolutions
– Determination of the time of the next shareholders’ meeting (regular or extraordinary)
– Signatures of all participating shareholders

###Shareholders' meeting – summons and deadlines

There are no legal regulations as to which organizational matters must be clarified first before the participants can discuss the individual agenda items. The only important thing is that all shareholders have been invited in the correct form and on time. Otherwise, resolutions can be challenged due to a lack of form. If shareholder resolutions are pending, the permitted majority specified in the contract counts in the vote. If this is not specified, the decision is made by a simple majority.

If you would like to obtain legal advice on conducting your shareholders' meeting or specifically on drafting the partnership agreement, please do not hesitate to contact my specialist law firm andrelang law. I'm happy to be of service to you.

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dr Andrelang, LL. M

Specialist lawyer for international business law

Specialist lawyer for commercial and corporate law

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