Procedure for organizing a general meeting of shareholders in a joint stock company

Procedure for organizing a general meeting of shareholders in a joint stock company requires strict compliance with legal regulations from the Law on Enterprise 2020. Preparation, convening, organization and minutes must be carried out in a certain order to ensure the legality and effectiveness of the congress resolution. The article below will analyze the steps to carry out the process of organizing a general meeting of shareholders according to current regulations.

General regulations on general meeting of shareholders

The General Meeting of Shareholders is defined in Clause 1, Article 138 of the Law on Enterprise 2020 as the highest decision-making body of a joint stock company. The General Meeting of Shareholders exercises the right to decide on issues falling within its statutory authority. A joint stock company holds a General Meeting of Shareholders to gather all shareholders with voting rights to discuss and approve contents related to business activities.

Shareholders can attend directly or authorize a representative to attend as prescribed in Article 144 of the Law on  Enterprise 2020. The General Meeting of Shareholders has the powers and duties specifically stipulated in Clause 2, Article 138 of the Law on Enterprise  2020. Specifically:

• Determine company development direction;
• Decide on the type and number of shares and annual dividends;
• Elect, dismiss and dismiss the Board of Directors and Controllers;
• Decide to invest or sell assets of 35% or more of total asset value;
• Amending and supplementing the company charter;
• Approve annual financial reports;
• Decide to buy back more than 10% of sold shares;
• Review and handle violations of the Board of Directors and Controllers;
• Decide to reorganize or dissolve the company;
• Decide on budget, remuneration and bonuses for the Board of Directors and Supervisory Board;
• Approve internal governance regulations, activities of the Board of Directors and Supervisory Board;
• Approve and decide on independent audit companies and dismiss auditors;
• Exercise other rights and obligations according to the law and the company’s Charter.

When should a company consider organizing a General Meeting of Shareholders?

Pursuant to Article 139 of the Law on Enterprise 2020, joint stock companies organize an annual General Meeting of Shareholders once a year. The time limit for holding an annual meeting is no more than 04 months from the end of the fiscal year. The annual meeting discusses and approves contents including the annual business plan, annual financial reports, and reports of the Board of Directors on management and operating results.

In addition to the annual meeting, the General Meeting of Shareholders holds an extraordinary meeting as prescribed in Clause 1, Article 140 of the Law on Enterprise 2020 in the following cases:

• Considered necessary for the company’s benefit;
• The remaining number of members of the Board of Directors and Supervisory Board is less than the minimum number of members according to regulations;
• At the request of a shareholder or group of shareholders owning 05% or more of the total common shares;
• At the request of the Supervisory Board;
• Or other cases according to the provisions of law and the Company’s Charter.

An extraordinary meeting of the General Meeting of Shareholders must be convened within 30 days from the date of the event requiring the convening of the meeting (such as the number of remaining members of the Board of Directors or the Board of Supervisors being less than the minimum number of members), or within 60 days from the date of receipt of a request from a shareholder, group of shareholders or the Board of Supervisors.

Procedure for organizing a general meeting of shareholders in a joint stock company

Prepare for the meeting

Preparing for the General Meeting of Shareholders requires the company to comply with strict legal procedures. The Board of Directors is responsible for convening the meeting and must ensure the conditions for its conduct as prescribed in Article 145 of the Law on Enterprise  2020.

During the preparation process, the joint stock company needs to perform the following tasks:

• Prepare a list of shareholders with the right to attend the meeting;
• Prepare meeting documents on issues to be discussed;
• Drafting draft resolutions of the General Meeting of Shareholders;
• Choose a suitable location and time for the event.

According to the provisions of Clause 1, Article 141 of the Law on Enterprise 2020, the list of shareholders entitled to attend the General Meeting of Shareholders shall be prepared no later than 10 days before the date of sending the notice of invitation to the General Meeting of Shareholders, unless the Company Charter stipulates a shorter period.

The location of the General Meeting of Shareholders must be within the territory of Vietnam. The meeting location needs to be convenient for attending shareholders, ensuring space suitable for the number of attendees. In case of holding an online meeting, the company must ensure that the information technology system meets the requirements for security, connection stability and shareholder identity authentication.

Invitation to the General Meeting of Shareholders

The notice of invitation to the General Meeting of Shareholders is an important step in the process. Accordingly, the person convening the General Meeting of Shareholders must send the notice of invitation to all shareholders on the list of shareholders entitled to attend the meeting at least 21 days before the opening date of the meeting, unless the Company’s Charter stipulates a longer period.

The meeting invitation notice must include the following contents:

• Name and address of head office;
• Company business code;
• Meeting time and location;
• Name and contact address of shareholder;
• Meeting agenda;
• Authorization form;
• Draft resolution for each issue in the meeting agenda;
• Participation and voting methods.

In addition, the meeting invitation must be accompanied by the following documents:

• Meeting agenda, documents used in the meeting and draft resolutions for each issue in the meeting agenda;
• Voting form.

Methods of sending meeting invitations can be done in the following forms: direct sending; sent by registered post to the shareholder’s registered address; send email to shareholder’s email address; posted on the company’s website; or other methods as prescribed in the company’s Charter.

CSPL: Article 143 of the Law on Enterprise 2020.

Organize a general meeting of shareholders and vote at the meeting

About meeting organization:

Before opening the meeting, the company must carry out procedures to register shareholders to attend. Shareholders attending the meeting must present identification documents, power of attorney (if authorized) and related documents according to regulations. The Shareholder Eligibility Inspection Committee checks and reports the rate of shareholder attendance to determine the validity of the meeting.

At the General Meeting of Shareholders, key positions were identified as follows:

• The Chairman is the Chairman of the Board of Directors or the person authorized by the Chairman;
• The meeting secretary is appointed by the Chairman;
• The vote counting committee is elected by the General Meeting of Shareholders at the request of the Chairman.

The chairman runs the meeting, ensuring order and compliance with the approved program.

Regarding voting at the meeting:

Voting at the General Meeting of Shareholders is carried out according to the provisions of Article 148 of the Law on Enterprise 2020 as follows:

The first, the following resolution is passed if approved by the number of shareholders representing 65% or more of the total votes of all shareholders attending and voting at the meeting; the specific ratio is prescribed by the company charter:

• Type of shares and total number of shares of each type;
• Changing industries, occupations and business fields;
• Change the company’s organizational and management structure;
• Investment projects or asset sales with a value of 35% or more of the total asset value recorded in the company’s most recent financial report, unless the company charter stipulates a different ratio or value;
• Reorganize and dissolve the company;
• Other issues are regulated by the company charter.

Second, other issues are approved when more than 50% of the total votes of shareholders attending the meeting are in favor.

Third, in case the General Meeting of Shareholders passes a resolution by collecting written opinions, the resolution will be considered valid and passed if more than 50% of the total votes of all shareholders with voting rights agree. The specific ratio of approval votes can be stipulated in more detail in the company charter.

Fourth, for resolutions related to adverse changes in the rights and obligations of shareholders owning preferred shares, the resolution may only be passed if one of the following two conditions is met:

• There is at least 75% of the total number of preferred shares of the same type approved by shareholders attending the meeting; or
• At least 75% of the total number of preferred shares of the same type agree in case of collecting written opinions.

Besides:

• Unless the Charter stipulates otherwise, the election of the Board of Directors and Supervisory Board must be by cumulative voting method.
• Each shareholder has a number of votes equal to the number of shares owned multiplied by the number of members to vote, and can accumulate votes for one or more candidates.
• The winner is determined by the number of votes from highest to lowest until a sufficient number is reached.
• If many candidates with the same number of votes are in the last position, they will be re-elected or selected according to the election regulations or Charter.

CSPL: Article 148 of the Law on Enterprise 2020.

>>> See more: Conditions for passing resolutions of the General Meeting of Shareholders.

Procedure after the general meeting of shareholders

After the General Meeting of Shareholders ends, the company must complete legal procedures. According to Article 150 of the Law on Enterprise 2020, the first thing is to prepare minutes of the General Meeting of Shareholders. Minutes must be completed and approved before the end of the meeting, signed by the Chairman and Secretary. The minutes must clearly state the following contents:

• Meeting time and location;
• Meeting agenda and content;
• List of chairmen and secretaries;
• Summary of statements at the meeting;
• Number of shareholders and total votes of shareholders attending the meeting;
• Total number of votes for each voting issue;
• Issues that have been passed and the percentage of votes passed.

According to the provisions of Clause 5, Article 148 of the Law on Enterprises 2020, the company must send meeting minutes and resolutions to shareholders upon request within 15 days from the date of approval. For public companies, the company must disclose information about the Resolution and Minutes of the General Meeting of Shareholders in accordance with the provisions of securities law.

The company must register changes to its business registration if the resolution of the General Meeting of Shareholders contains contents related to changes in name, head office address, business lines, charter capital, and information about the legal representative. The deadline for registration of changes is 10 days from the effective date of the resolution.

Consulting services on the process of organizing a general meeting of shareholders for joint stock companies at Long Phan Consulting Company

Long Phan Consulting Company provides comprehensive consulting services on the process of organizing General Meeting of Shareholders for joint stock companies. With a team of consultants with many years of experience in the corporate sector, we support customers in complying with regulations and optimizing meeting efficiency. Consulting services include drafting documents, guiding the process of convening and organizing the General Meeting of Shareholders.

Long Phan Consulting Company provides specific services such as:

• Support reviewing the list of shareholders with the right to attend the meeting;
• Assist in drafting meeting invitations, meeting agendas, and draft resolutions;
• Consulting on appropriate venue and time;
• Support for shareholder registration and shareholder status check;
• Support in drafting minutes and resolutions of the General Meeting of Shareholders;
• Guide your businesses to disclose information after the General Meeting of Shareholders.

Consulting services of Long Phan Consulting Company help joint stock companies save time, costs and ensure compliance with legal regulations. At the same time, organizing a professional General Meeting of Shareholders also contributes to enhancing the image of the business in the eyes of shareholders and partners, thereby ensuring effective operations and business processes and eliminating unnecessary legal risks.

Frequently asked questions

Below are frequently asked questions about the process of holding a General Meeting of Shareholders.

What are the specific requirements to organize an online General Meeting of Shareholders (AGM)?

Organizing an online General Meeting of Shareholders requires the use of an information technology system that ensures security, stable connection and accurate authentication of shareholder identities. The chosen platform needs to facilitate real-time interaction, voting, and secure exchange of meeting documents.

What are the rights of shareholders when attending the General Meeting of Shareholders?

Shareholders have the right to receive meeting invitations and related documents, participate in discussions, ask questions, vote on proposed resolutions, and nominate or elect members of the board of directors and supervisory board, in accordance with the law and the company’s charter.

What are the consequences if you do not comply with the regulations governing the General Meeting of Shareholders?

Failure to comply with AGM regulations can lead to administrative penalties, legal challenges to the validity of passed resolutions, and potential damage to the company’s reputation and shareholder confidence.

How can shareholders propose agenda items or resolutions for the AGM?

Shareholders or groups of shareholders who meet specific ownership thresholds (as prescribed by law or the company’s charter) have the right to submit proposals for agenda items or resolutions within a specified period of time before the AGM.

What is the role of the authorized person and how is the authorization form submitted?

A proxy is an individual authorized by shareholders to attend and vote on their behalf at the General Meeting of Shareholders. Authorization forms are usually submitted in writing or electronically, according to the procedures outlined in the meeting invitation and company charter, within a specific period before the meeting.

What are the legal consequences of conflicts of interest during the General Meeting of Shareholders?

Individuals with conflicts of interest in relation to matters being discussed or voted on at the AGM have a legal obligation to disclose these conflicts and may be restricted from voting on those specific matters to ensure fairness and transparency.

What is the procedure for amending the company’s charter during a General Meeting of Shareholders?

Amending the company’s charter often requires a special resolution passed by an absolute majority of shareholders (usually 65% ​​or more of the votes of shareholders attending and voting), according to the provisions of the Law on Enterprise and the current charter. Proposed amendments must be clearly stated in the meeting invitation.

What are the record keeping requirements for AGM proceedings other than meeting minutes?

In addition to meeting minutes, companies are often required to keep records of attendee lists, proxy forms, votes and any other relevant documents relating to the AGM for a period of time prescribed by law.

What is the process for resolving shareholder questions or disputes arising from the General Meeting of Shareholders?

Companies should establish a clear process for addressing shareholder queries before, during and after the AGM. Disputes arising from the AGM may be subject to internal complaints procedures or external legal resolution, depending on the nature of the matter.

Are there any specific regulations related to foreign shareholders’ participation in the General Meeting of Shareholders?

Foreign shareholders generally have the same rights to participate in the AGM as domestic shareholders, although there may be specific procedures for registration, verification of identity and exercise of voting rights, particularly if they hold shares through a nomination account.

Conclude

The process of holding a general meeting of shareholders plays an important role in joint stock company governance, requiring strict compliance with the provisions of the Law on Enterprise 2020. Long Phan Consulting Company is ready to support businesses in properly implementing the process, from preparation to completing documents after the meeting. To receive in-depth advice on this issue, please contact the hotline: 1900636389 to receive the most professional support.