General meeting of a joint-stock company`s participants
A joint-stock company is an organizational-legal form of legal entities, whose authorized capital is divided into a definite number of shares of the same nominal value between shareholders.
Shareholders obtain a right to dividends within the value limits of the assets owned by them, as well as a right to participate in corporate governance. Such a form of participation is the most beneficial and popular, as shareholders bear limited liability for the company`s financial obligations, which is determined by a general monetary equivalent of shares owned by a certain person.
A joint-stock company shall convey the general meeting of shareholders annually. It is prescribed by the Law of Ukraine “On Joint-Stock Companies” as of 2010. Its relevance is supported by changes and amendments that were made.
An annual general meeting must be conducted according to an agenda prepared by the supervisory board of a joint-stock company. In cases, established by the law, an agenda can be composed of shareholders who own shares not less than 10% of authorized capital.
The procedure for holding shareholders` general meeting (SGM)
Persons, who are holders of ordinary shares and are included in a list of shareholders who have a right of such participation, or their representatives, have a right to participate in a general meeting of shareholders. Holders of preferred shares also have such a right in exclusive cases, set by the Law of Ukraine.
A supervisory board deals with questions of conveying of shareholder`s general meeting. Delegating of their powers to convey an SGM to other bodies of a joint-stock company is not stipulated. Each holder of ordinary shares must be notified of the date of holding a general meeting not later than 60 days before the date. A form of notice, prescribed by the charter, must be observed. Also, a joint-stock company additionally notifies of holding an SGM and of a project of an agenda to an operator(s) of a stock exchange on which this company has been listed, and not later than 30 days before the date of holding a general meeting shall also publish a notice of holding the general meeting in a web-site.
Conveying of a general meeting can be annual or extraordinary. An extraordinary public company general meeting shall be convened by the supervisory board:
- on its initiative;
- on demand of the executive body – in case of initiating the company bankruptcy proceedings or, if necessary, making a significant legal transaction.
- on demand of the audit commission (inspector);
- on demand of the shareholders (shareholder) who jointly are owners of 10 percent and more of the company ordinary shares on the date of filing the demand.
- in other cases established by the law or the company charter.
If a date of holding a general meeting is set, an agenda must be established by the supervisory board. New points on demand of shareholders, who jointly own more than 5% of a joint-stock company authorized capital, may be added to the agenda.
Extensive assistance in establishing a joint-stock company may be provided by specialists of the Attorneys at Law “Bachynskyy and Partners”.
Rules of holding a shareholders meeting
To the consideration of the general meeting may be submitted only issues, established by the charter or the Law.At the general meeting, voting shall be organized on all issues of the agenda put to vote. The general meeting cannot make decisions on issues, not included in the agenda, except for issues of changing the order of consideration of an issue and annunciation of a break in the course of the meeting until the next day.
Well-defined issues must be included, that require a collective discussion and making an agreed decision, to the agenda.
Non-observance of the agenda is also considered as a violation of the Law, which may entail complicated corporate judicial proceedings. Those are not all pitfalls it is possible to come across in the course of preparation for an SGM.
To hold a shareholders` general meeting effectively in full compliance with the Law, it is better to get help from lawyers who know all intricacies and will not make any mistakes in composing documents.
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