Are shareholder meetings required to be held annually or otherwise, and what information needs to be presented?
The ordinary shareholders’ meetings are to be called by the management board once a year, at the latest within 8 months following the end of the preceding business year. The convocation must be published and state the name of the company as well as the time and place of the meeting. The last publication of the convocation must not be made later than 28 days before the date of the meeting.
The shareholders' meeting is the centre of information and the statutory platform for communication for shareholders vis-à-vis the company and among each other. Accordingly, the Austrian Stock Corporation Act provides for various information duties applicable to the management board and the supervisory board, as well as information and proposal rights for shareholders, each to be exercised in the shareholders' meeting. The duty to provide information is linked to the respective items on which the shareholder meeting shall render its decision and may vary from information on the course of business (in relation to the resolutions related to the financial statements, the distribution of profits as well the release form liability of the management board and the supervisory board for a specific business year) to providing background information with respect to a potential filing of claims against the management board or the supervisory board. Further information that needs to be presented may relate to amendments to the articles of association, changes to the share capital, reorganisation matters (mergers, spin-offs), the sale of all or a material part of the assets of the company as well as the liquidation of the company.
Further, the shareholders' right to request information about the items on the agenda is one of the core member ship rights. The answers usually have to be given by members of the management board during the shareholder meeting and in any case have to be true, complete and understandable. The information request may only be denied if the information, in the reasonable opinion of the company, it is likely to cause a substantial disadvantage to the company itself or to its affiliates or if providing such information would be punishable by law.
Under Brazilian law, shareholders must hold at least one ordinary meeting annually for the purposes of reviewing and resolving upon the company’s financial statements of the preceding fiscal year. Companies must disclose their financial statements, together with the management report, the independent auditors’ report and the opinion of the fiscal board, if installed, at least one month in advance of the ordinary shareholders’ meeting.
See answer to question 16.
Shareholder meetings of a company are convened by the Management Board at least annually, usually within the first six months of a calendar year. In urgent cases, the Management Board may convene extraordinary shareholder meetings.
In various cases, the law requires the presentation of written information at the shareholder meeting. Apart from the regular report of the Supervisory Board, this includes reports for certain measures, such as capital increases, repurchase and sale of treasury shares, mergers, spin-offs and the change of legal form. It may also include certain other reorganization measures such as the contribution of 80% of the business to a subsidiary.
The general meeting must meet at least once each year by the tenth (10th) calendar day of the ninth month after the end of the financial year in order to decide on the approval of the annual financial statements and the election of auditors (Annual General Meeting). The annual general meeting may also decide on any other matter of its competence.
The general meeting shall meet extraordinarily at any time whenever the board deems it appropriate or necessary (Extraordinary General Meeting).
The general meeting convened to amend the articles of incorporation or take decisions requiring an increased quorum and majority (statutory general meeting) may be regular or extraordinary.
In practice, the information presented in the General Meeting minutes, is the date, time and place of the convocation, the representation of the shareholders in the meeting, the confirmation of its lawful convocation by the president of the general meeting, the items of the agenda and the main body of the resolution of the general meeting on the items of the agenda.
An AGM is helpful for maintaining good corporate governance because it provides the shareholders an opportunity to question the directors and management, and handle various types of corporate matters, including without limitation to the appointment or removal of auditors (sections 396 & 419 of the Companies Ordinance) and directors (sections 460 & 462 of the Companies Ordinance), as well as the approval of financial statements (section 429 of the Companies Ordinance).
Pursuant to section 610 of the Companies Ordinance, every private company is required to be hold AGM each year nine months after the end of its accounting reference period to which the financial year is to be determined, and for other companies, six months. If the accounting reference period is the company’s first such period and is longer than 12 months, a private company must hold the AGM nine months after the anniversary of the company’s incorporation or 3 months after the end of that accounting reference period, and in the case of other companies, 6 months and 3 months respectively. However, a company may dispense with the requirement of AGM by way of a resolution passed by all shareholders who are entitled to vote (section 613 of the Companies Ordinance). If the company fails to hold the AGM which has not been dispensed with within the specified periods, any shareholder can apply to the court to call the AGM.
According to paragraph E.1 of the Corporate Governance Code, a listed company should hold AGMs or other general meetings to allow communication between the board and the shareholders. An AGM is usually held to approve the audited financial statements and the reports of the directors and auditors, the final dividend and any bonus issue of shares, directors’ emoluments and so on. The chairperson of the board should attend the AGM and should also invite the chairpersons of the audit committee, remuneration committee, nomination committee and any other committees to attend. Pursuant to the Listing Rules, a listed company should arrange for the notice to shareholders on AGMs to be sent at least 20 clear business days before the meeting and to be sent at least 10 clear business days for all other general meetings. Where such notice is published in the newspapers, it must be of a size of not less than 8 centimeters by 10 centimeters (three inches by four inches approximately) (rule 13.37 of the Main Board Listing Rules), and must state that the notice is available for viewing on the Hong Kong Stock Exchange’s website and the listed company’s own website with details as to where on these websites such notice can be found (rule 2.07C of the Main Board Listing Rules).
In Japan, companies are required to hold a shareholders' meeting annually (ordinary shareholders' meeting), and commonly hold their ordinary shareholders' meetings within three months after the end of each fiscal year. In this meeting, shareholders vote on items such as the appointment of directors/statutory auditors and the distribution of dividends (see question 20). Companies may also hold extraordinary shareholders' meetings when necessary.
Before an ordinary shareholders' meeting, a convocation notice, including reference materials for exercising voting rights, financial statements and business reports, must be provided to shareholders at least two weeks before the date of the meeting.
Shareholder meetings shall be held at least annually (in the 5 or 3 months after the end of the financial year, depending on whether the company is obliged to present consolidated accounts or not) to resolve on the annual reports and accounts, allocation of profits and corporate bodies’ appraisal, as well as on the election of corporate bodies, when applicable.
The GMS is either an OGMS or EGMS. The OGMS is convened once every fiscal year and main agendas include approval of financial statements and business reports and election of director(s).
Under the KCC, the following documents must be prepared, kept at the company’s head office (and branch offices, if any) and made available for inspection by shareholders and creditors at least one week in advance of the OGMS: (i) a business report prepared by the director(s), (ii) financial statements prepared by the director(s) and (iii) an internal audit report prepared by the statutory auditor (or the audit committee if applicable).
Swiss companies must hold an annual shareholders meeting within six months after the close of the business year and may hold further (extraordinary) shareholders meetings, if necessary. Each shareholder has the right to receive each year a copy of the audited (consolidated and stand-alone) financial statements of the company, the management report the compensation report, and the audit report of the auditors (typically all included in the annual report). In addition, each shareholder has the right to ask questions to the board of directors and the auditor during the general meetings. Information requested by the shareholder has to be provided to the extent such information is necessary for the shareholder to exercise its rights. Disclosure of information can be refused if it jeopardizes the business secrets or other worthy interests of the company.
Only public companies and private companies that are traded companies (essentially being companies whose shares, securities equivalent to shares (including depositary receipts), bonds or derivatives are traded on a capital market) are required to hold an annual general meeting.
Annual general meetings typically deal with matters that must be dealt with each financial year, and often include, amongst other matters: approval of the annual report and accounts, approval of the remuneration report, approval of the directors' remuneration policy (at least once every three years), the appointment/re-appointment of directors, the appointment/re-appointment of auditors (and fixing their remuneration), authority to allot shares, disapplication of pre-emption rights, consent to general meetings being held on 14 days' notice, approval for buybacks, approval of political donations, adopting or amending an employee share scheme, a capitalisation or bonus issue of shares, and approval of a scrip dividend alternative or dividend re-investment plan. Other company-specific approvals may also be sought at an annual general meeting.
Every state requires a corporation to have an annual shareholders’ meeting. In addition, the NYSE requires its listed corporations to hold an annual shareholders’ meeting during each fiscal year, and NASDAQ requires its listed corporations to hold an annual shareholders’ meeting no later than one year after the end of the corporation’s prior fiscal year. Typically, a company’s organizational documents will also require an annual meeting and designate the time and place of the meeting. The annual meeting is necessary to elect the board of directors and conduct other business on behalf of the company.
A public company must comply with the SEC’s proxy rules when its management submits proposals to a shareholder vote. Typically, companies provide a proxy card to shareholders, which, when executed, grants to the company the authority to vote the shareholders’ shares at the meeting as designated on the card. The proxy card must be accompanied by certain disclosures in a proxy statement, including a description of matters to be submitted to a shareholder vote (including properly submitted shareholder proposals) and management and executive compensation information. The proxy rules also require the company to send an annual report to shareholders if there will be an election of directors at the meeting. If a shareholder vote is not being solicited and action has been taken by the written consent of a majority of shareholders instead of voting at an shareholder meeting, the company must instead provide shareholders with an information statement that is similar to a proxy statement. Lastly, the proxy rules also require the company to provide shareholder lists to investors.
Pursuant to Art. 2364, par. 2, ICC, the board of directors shall call the shareholders or quotaholders’ meeting at least on a yearly basis, no later than 120 days from the date of expiration of the financial year (usually set by the by-laws at 31 December) – or 180 days from such date if the company is required to consolidate the accounts of other entities or such term extension is grounded on reasons relating to the corporate purpose or structure – for the purposes of resolving upon the financial statements, which shall be made freely accessible to the shareholders (at the corporate seat) at least 15 days prior to the meeting.
With sole reference to listed companies, Art. 125-ter CFA sets forth that, together with the calling notice, the shareholders shall be provided with written reports on each of the items on the agenda, prepared by the board of directors.
It is worth noting that, pursuant to Art. 2374 ICC, shareholders holding at least 1/3 of the corporate capital shall have the right to request a postponement of the meeting, should they assert not to have enough information on the item to be addressed. The new meeting shall convene no later than 5 days from the original date.
The shareholders can both have an ordinary and extraordinary GA meeting. The ordinary meeting shall be held within 3 months after the end of each activity period. In this meeting the shareholders can take decisions regarding the appointments of bodies, financial statements, annual report of the BoD, the use of profit, determination of dividends and the profit shares to be distributed, release of the board members and the other matters deemed necessary. The shareholders can be called for an extraordinary meeting if necessary (TCC, article 409).
The person calling the GA must prepare the agenda. In principle, the matters not included in this agenda cannot be taken into consideration in the meeting (TCC, article 413).
At least one shareholder meeting must be held per year, in order to approve the annual accounts of the company, decide the allocation of the results and potentially give discharge to the board members.
JSCs must hold an annual shareholder meeting (GM) by 30 April following the respective financial year. The agenda of such annual meeting should cover payment of dividends, the approval of the company`s annual financial report as well as the reports of the supervisory board, the executive board and the audit commission. Public JSCs must also approve reports on the compensation of supervisory board members and assess the necessity of amending regulations on remuneration of board members at such annual meetings.
All other shareholder meetings are considered extraordinary and may be called at any time and for any reason pursuant to the procedure stipulated by law and the company`s charter.
Proprietary companies are not required to hold annual general meetings (AGMs).
Public companies must hold an AGM at least once each year, and within five months of the end of its financial year. The statutory annual financial report, auditor’s report and directors’ report must be presented to the AGM. The AGM must consider the advisory resolution on the remuneration report, and will commonly consider the re-election of directors. The company auditor must attend the AGM. Shareholders have a right to submit questions to the auditor in advance, and must be given an opportunity to ask questions of the auditor at the meeting. An opportunity must also be allowed for shareholders to ask questions about, or make comments on, the management of the company and the remuneration report.
The OGM meeting of the company shall be held annually to discuss the and approve the annual reports of the company, i.e. the report is to be prepared by the board of the company, the financial statements, the appointment and removal of board of directors and their remuneration, the appointment and removal of the auditor and his remuneration, the dividends distribution and the related parties transactions.