Organization and conduction of a general meeting of shareholders

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.

Order our services at legalaid.ua.

Articles
A new law on virtual assets: the picture is formed, but without details. On September 8, 2021, the Verkhovna Rada has finally adopted the long-awaited law "On Virtual Assets", which clarified many ambiguous points. This is especially true for the status of cryptocurrency and the rules of its circulation in the country. Let`s take a closer look at novelties. An ambiguous term Let's start with what the legislator actually means by "virtual assets". There are the following features:  they are an intangible good (cannot be represented on tangible media)  fall under the list of objects of civil rights (that is, they can be owned and be disposed of)  represent an electronic form of a set of data (essentially, they are blocks of information put in order);  the existence and circulation of assets are due to software tools (specific electronic environment). From these features we can draw the following conclusion: virtual assets are not limited to cryptocurrency. Digital currency is part of the concept, but other instruments, such as tokens, NFTs, or even in-game items, fall under the definition. Actually, the actual existence of most digital products, having a certain value, is due to the software environment (ecosystem), either it is blockchain technology, a trading platform, or an online game server. It should be noted that the attempt to define virtual assets was already made in the adopted Law of Ukraine in counteracting money laundering. In this act, they understand it as digital means of payment, which goes against the new definition. As a result, there are now two different explanations for virtual assets, which causes significant confusion not only in regulation but also in interpretation. It is definitely necessary to expect clarifications from competent state bodies. Let's return to the new law. Its application covers legal relations in which the "Ukrainian element" is present:  provider or recipient of services represented in Ukraine;  an agreement according to which the turnover of virtual assets is carried out in accordance with Ukrainian legislation;  the acquirer of assets (or both counterparties) is a resident(s) of Ukraine. The law also introduces an interesting division of all virtual assets into two groups: secured and unsecured. Here again, there is a problem of interpretation. The first category includes products exchanged for (state) currency, the second category includes instruments that can be exchanged only for other digital assets. There is an alternative opinion: that the turnover of secured assets is supported by real goods (money or other property), while unsecured ones are not supported by anything. The latter interpretation is the most credible, as the new law stipulates that virtual assets are NOT means of payment. Moreover, they cannot be exchanged for real goods, be they property, services or money. This significantly narrows the potential for the use of virtual assets not only for commercial but also for civilian purposes. About obligatory licensing The new law states that in some cases, the use of virtual assets will require licensing. The 4 types of activity are mentioned:  storage and management of virtual assets (or its` keys)  servicing of exchange operations with virtual assets (both for other analogues and for real goods);  translation of digital assets;  any intermediary services. A list is quite impressive, but there are some important exclusions:  if your service works with cryptocurrency wallet (it means users can dispose of accumulations into cryptocurrency independently);  If your service works on smart contracts or decentralized protocol, based on which internal transfers are performed. As to intermediary services, everything is more compicated. Actually, any mediation is based on the public share offering. That is why it is subject to licensing. How to get a license? A company that wishes on legal grounds to engage in virtual assets must satisfy legislative requirements. The key role is played by the minimum amount of the statutory capital, which equals 1,19 million hryvnyas (for non-residents it is 5,95 million hryvnyas) in case of storage and administration. For other types of activity (trading, translation and mediation services) the minimum size of the statutory capital amounts to 595 thousand hryvnyas (for non-residents is 2,98 million hryvnyas). The order of the registration of license:  to compose an application and prepare documents.  to pay state fee (68-136 thousand hryvnyas for residents and 340-680 thousand hryvnyas is for non-residents).  to pend review of the request (30 days).  to get a license. The duration of the license is 1 year. No norms about the continuation of legal force of permission are set (we are expecting amendments or explanations from the Ministry of Digital transformation of Ukraine). Notably that non-residents must pay a far greater sum, than domestic companies. The Ukrainian legislator obviously encourages an internal market, getting rid of a strong foreign presence (that, in fact, coincide with modern politics of the state on the whole). Together with an application, the following documents must be prepared: The access code to the copy of the Statute of the company (or the foundation agreement) kept in an electronic file in the database of the Unified State Register of Enterprises and Organizations (USREO);  Funding sources of the statutory capital (where the money are taken from);  confirmation of the actual injection of money;  information about beneficiaries (special attention must be paid to business reputation);  the information about the director and founders;  the check about payment of state fee;  the internal regulations, in accordance with which ones, the privacy policy rules are regulated. In the terms of volume of necessary documentation of licensing is very alike with complete registration of legal entity. It is understood that the state wants the severe adjusting of activity of organizations that will engage in virtual assets. Is it already possible to get a license? The adoption of the law by the parliament is a significant step forward in adjusting and legal market of virtual assets creation in Ukraine. However, the new rules haven`t come into effect yet - their term of introduction depends on making amendments in the Internal Revenue Code. It is yet unknown, when a legislator will decide to enter the renewed system of taxation for such assets. Being "IT-hub" and territory, where cryptocurrency enjoys large popularity, the question of taxes must be decided maximally safely. Despite the presence of obvious gaps in interpretation, a new law on virtual assets gives the official narrative of what takes place and that, how the legal relationships related to cryptocurrency will be regulated. It is to be hoped that in the nearest time the Ministry of digital information will give out the detailed explanations concerning debatable norms.
20/01/2022
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