12 stumbling blocks that can cause any general meeting to falter
Introduction
The Annual General Meeting (AGM) - for many board members, this is a must-attend event that follows a standard procedure. However, anyone who believes that this is all there is to it underestimates the legal and practical pitfalls. We know from our experience with numerous AGMs: It is often the small negligence that has a big impact.
We have therefore compiled 12 common "stumbling blocks" that board members should be aware of - and avoid - before, during and after the AGM.
BEFORE the Annual General Meeting
Our tip: A formal BoD meeting to approve the proposals is mandatory. Only then may the invitation be issued. If necessary, a circular resolution can also be passed.
2nd invitation sent - but important documents are missing
Anyone who forgets to enclose the annual report or audit report risks the invitation being deemed incomplete and the motion therefore being contestable and possibly even null and void.
Our tip: All relevant documents (annual report, audit report and other documents relevant for motions) should be included with the invitation at least 20 days before the AGM - neatly compiled and complete.
Many people know this: The AGM invitation must be sent at least 20 days before the AGM. However, the day of dispatch and the day of the AGM do not count.
Our tip: Therefore, always count the invitation date plus 21 days or the invitation date in 3 weeks. I.e. invitation on May 2 -> AGM on May 23 at the earliest - with the exception of the Universal General Meeting.
Purely virtual AGMs are only permitted if the articles of association expressly allow this. This only became possible with the revision of company law on 01.01.2023.
Our tip: Check the articles of association - and adapt them if necessary in a hybrid AGM (always possible) so that all forms of AGM are possible.
Anyone who conducts hybrid or virtual GMs without regulations on voting, video transmission, etc. is acting negligently.
Our tip: The BoD should regulate the use of electronic means in writing and in a clearly comprehensible manner (note: Konsento offers templates).
If participation certificates are in circulation, their holders must also be informed about agenda items - not just shareholders.
Our tip: Inform participants separately and only as much as necessary about GM.
DURING the General Meeting
A classic: The CEO, but the shareholder is not a member of the BoD, votes on the discharge of the BoD - inadmissible!
Our tip: Persons who have participated in the management in any way may not vote on the discharge of the BoD - Do not count as abstentions, but adjust the number of shares represented for this agenda item.
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8. suppress shareholder motions
Shareholders have the right to submit alternative motions to existing agenda items for voting during the AGM - even without prior notice.
Our tip: Be aware of this possibility and basically have a "plan" for how to easily implement an additional vote.
9. ambiguities in share categoriesIf you don't know which shareholders represent how many shares of which share category, you may be in for some nasty surprises when it comes to voting.
Our tip: Have transparency about the voting power of each shareholder per category so that votes can be counted quickly and correctly - ideally with software support.
Not every resolution requires a simple majority - special quorums often apply to preference shares in particular.
Our tip: Consult the Articles of Association and the Code of Obligations in advance - it is better to be too thorough than too lax.
11. forgetting the re-election of the BoD
A fatal faux pas: if the Board members are not re-elected on time, they lose their mandate and are no longer able to act - with drastic consequences.
Our tip: Set up the re-election as an annual standard AGM agenda item or staggered re-elections - but be careful, the Articles of Association may stipulate a minimum number of BoD members.
AFTER the General Meeting
The minutes are not just a formality - they must be signed and shareholders must be allowed to inspect them within 30 days of the AGM upon request.
Our tip: Make minutes easily accessible to all shareholders and archive them in a central location, e.g. digitally.
The good news is that all these stumbling blocks can be avoided with a little mindfulness. Even better: those who rely on digital support such as Konsento not only have all the formalities under control - they also have more time for the essentials.
Would you like to hold your Annual General Meeting efficiently and in compliance with the law?
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Anyone who forgets to enclose the annual report or audit report risks the invitation being deemed incomplete. applies r