TheOrdinary General Meeting of a company, more commonly known as the "Annual General Meeting", is the meeting of the associates or shareholders of a company to take a certain number of decisions on the agenda.
They are usually held in May and June, after the previous year's accounts have been closed and filed.
Other decisions return to the agenda every year: presentation of the management report and approval of the annual financial statements are part of the ritual.
It is also the moment when all shareholders or associates can make their voices heard by management, and influence decisions. The right to convene meetings is strictly governed by precise rules, which must be complied with to avoid sanctions.
Here's everything you need to know to follow procedures to the letter and avoid any disputes.
Knowing whether your business requires an Annual General Meeting is not difficult: this is the case for all companies incorporated as corporations.
These include SAS, SARL, SA, SCI, SNC, SCA, SCS and all other types of company.
The notice of meeting must be sent by the company manager to all associates.
Some SARLs are managed on a joint-management basis. In this case, each of the two managers can take the necessary steps, unless the articles of association stipulate otherwise, and introduce special provisions.
If the sole manager is unable to assume this role, the statutory auditor may temporarily take over.
In the event of exceptional circumstances, such as the death of the sole manager, the statutory auditor or any partner may decide to convene an Extraordinary General Meeting.
In the normal course of the company's business, only an Ordinary General Meeting needs to be convened once a year.
Voting on certain more important decisions, or those requiring consultation with associates, may necessitate the holding of one or more extraordinary general meetings during the year.
Whatever the company's status, the notice of meeting must include the agenda for the Annual General Meeting.
This enables associates to be aware in advance of all the issues on which they will have to deliberate and vote. This enables them to make fully informed decisions.
The place, time, possibility ofbeing represented and list of useful documents for the general meeting must also be specified.
The notice of meeting must be sent by registered mail at least 15 days in advance to allow associates to exercise their right of communication.
SAS companies require fewer formalities to convene a General Meeting. Instead, you should refer to the conditions set out in the company's Articles of Association.
The convening of an annual general meeting for a SAS does not require the agenda to be included on the notice of meeting.
However, it is advisable to do so in order to improve the quality of associate decision-making.
The law does not specify any particular deadline for convening a meeting. Similarly, it is not mandatory to send the meeting notice by registered mail.
All these terms and conditions are set out directly in the articles of association.
Compliance with the formalities for convening the Annual General Meeting is absolutely essential if it is to run smoothly.
Indeed, if this is not the case, a partner may deliberately lodge an appeal with the Commercial Court , which will declare all decisions null and void. A frequent ground for nullity is failure to comply with the formalities for convening a meeting.
However, the person wishing to cancel the Annual General Meeting must prove that the decisions taken would have been different if it had been duly convened.
A shareholder who was present or represented at the meeting and did not raise the issue of nullity before the end of the meeting cannot contest it afterwards.
Any challenge must be made within six months, and must be decided by the Commercial Court.
Written by our expert Paul LASBARRERES-CANDAU
June 4, 2018
