The general meeting is an important moment for shareholders. Apart from the fact that the general meeting has the exclusive power to take certain essential decisions for the company (capital increase, contribution, merger, demerger, liquidation, appointment of directors, etc.), it is one of the only opportunities for (non-active) shareholders to have a direct dialogue with the members of the management committee and to be kept informed of the development of the business and the figures related to it. It is therefore essential to prepare a general meeting properly, to ensure that a shareholder knows his rights to vote with full knowledge of all the facts. In this article, we try, with a resolutely practical approach, to provide answers to the questions that shareholders have in the framework of the (ordinary or extraordinary) general meeting of an unlisted company.
1. How will I be informed of a general meeting?
Every general meeting must be convened by sending a registered letter to the shareholders. This at least 15 days before the date of the meeting. This means that each shareholder must be notified separately.
2. Who may convene a general meeting ?
The initiative to convene a general meeting lies, either with the Board of Directors whenever it deems it necessary and in cases where the law so requires, or with the auditor (if there is one) if exceptional circumstances so justify.
If one or more shareholders representing at least 10% of the issued shares (private company) or 1/10th of the capital (public limited company) request in writing that a general meeting be convened, the Board of Directors is obliged to convene the general meeting within three weeks after the shareholders’ request.
3. The ownership of some shares is split (usufruct / bare ownership). Who can vote at the general meeting?
The law explicitly provides that, unless the articles of association, a will or an agreement stipulate otherwise, the voting right is exercised by the beneficiary of the usufruct. Of course, this does not prevent the bare owner from attending the general meeting.
4. Is it possible for a shareholder to attend a general meeting remotely?
Yes, on condition that the Board of Directors decides to offer shareholders the opportunity to attend via electronic communication. Instructions for this method of participation will then be included in the invitation.
5. I would like my legal advisor to attend the general meeting. Is this allowed?
Although this right is regularly defended in practice, the law does not expressly recognise the right to assistance. It is therefore up to the general meeting to decide, by simple majority and depending on the circumstances, whether or not to authorise the presence of an adviser.
It is always recommended to inform the chairman of the board of directors in advance of your wish to be assisted.
6. I have received the invitation to a general meeting and would like to add an item to the agenda. Is this possible?
The right to request that items are added to the agenda is legally reserved only for listed companies. However, this right does not exist for shareholders of non-listed companies, unless the articles of association expressly grant it and provide for its exercise.
7. I have questions about some of the items on the agenda. How can I get more information so that I can vote in full knowledge of the facts at the general meeting?
Belgian company law enshrines the principle that shareholders have the right to ask questions of the directors and the auditor within the framework of a general meeting and to receive answers. This is the “right of interpellation”.
This right may be exercised orally (during the general meeting) or in writing (prior to the general meeting). However, the directors and the auditor are not obliged to answer written questions from shareholders.
If there is no statutory deadline for sending written questions before the general meeting, the list of questions must be sent sufficiently in advance to allow the directors and/or the statutory auditor sufficient time to prepare the general meeting and, if necessary, the written answers.
However, the right to ask questions is not absolute. The questions must relate to an item on the agenda or a report presented at the general meeting and may not lead to the disclosure of information that could be harmful to the company.
8. Can I demand that my statements and interventions in the general meeting are recorded in the minutes?
The content of the minutes is not determined by law. In practice, they should give as clear and objective a picture as possible of the course of the meeting and the decisions taken. This means that, depending on the context in which the discussions took place (whether or not there was disagreement between the shareholders), the transcription of the exchanges will be more or less detailed.
A shareholder may therefore request that his or her comments be included in the minutes, provided that the request is reasonable (particularly given the context) and relates to the agenda.
9. Is a shareholder required to sign the minutes of a general meeting?
A shareholder is not obliged to sign the minutes. The law stipulates that, in addition to the members of the office, only those shareholders who request it, shall sign the minutes.
10. By what majority must resolutions of a general meeting be taken?
Unless the law or the Articles of Association provide otherwise, resolutions shall be passed by a simple majority of votes (50% + 1 share). Abstentions are not taken into account and no special attendance quorum is required.
Some resolutions (to be passed during an Extraordinary General Meeting) require a higher attendance and voting quorum:
- an amendment of the articles of association requires the presence of shareholders representing at least half of the capital or the total number of issued shares and a majority of ¾ of the votes
- an amendment of the corporate purpose requires the presence of shareholders representing half of the capital or the total number of issued shares and a majority of 4/5th of the votes
- an amendment of the rights attaching to classes of shares must satisfy, in each of these classes, the attendance and majority conditions required for an amendment to the Articles of Association.
11. How to determine whether the agenda of a general meeting is sufficiently clear and precise ?
The agenda must contain a list of the subjects to be discussed at the general meeting.
It should therefore give a concise but clear summary of the items that will be submitted to the shareholders for deliberation (appointment of a director, approval of the annual accounts, capital increase, etc.). On the other hand, some agenda items do not require a vote at the general meeting (e.g. the resignation of a director, a special report by the Board of Directors, etc.).
In order to determine whether the agenda meets the legal requirements, the shareholder should check whether the agenda is sufficiently precise to enable him to assess his interest in attending the meeting, and sufficiently explicit to avoid surprises.
Shareholders should pay particular attention to the item “miscellaneous” (without further explanation) that is sometimes included in the agenda. In that case, only simple announcements can be made under this item which do not require a vote, and only detailed matters can be dealt with.
12. What are the main reflexes that a shareholder should have when being called to a general meeting?
We recommend that all shareholders ask themselves the following questions:
- Was the general meeting convened within the legal deadline of 15 days before it was held?
- Is the general meeting the competent body to take the decisions on its agenda?
- Have I been informed of all relevant information that would allow me to attend (or be represented at) the general meeting (time, date, place, admission procedures, proxy, remote participation, etc.)?
- Is the agenda clear and precise enough?
- Have I received the essential information to enable me to vote in full knowledge of the facts at the general meeting?
If one or more of these questions are answered in the negative, the shareholder always has the possibility to address the directors and/or the auditor by making use of his right of interpellation.
If you have any further questions on this subject, do not hesitate to contact Thibaut Claes.
