Annual general meeting

The Annual General Meeting, abbreviated HV, in company law is one of the three organs of a corporation, a partnership limited by shares or a Societas Europaea. It serves as a meeting of all shareholders of information and decision on business-related operations.

Also in other legal forms ( especially in clubs ), the assembly of all members or associates is sometimes referred to as " (annual ) General Meeting"; legally correct is it in clubs but a " general assembly " § 32 BGB and in the GmbH ( Limited Liability Companies Act § 48 ) or partnerships ( § 116 paragraph 2 HGB) is a " general meeting ".

• 2.1 convening
• 2.2 settlement
• 2.3 Limitation of the meeting time

• 3.1 Reference to other grounds for invalidity
• 3.2 Own Grounds for invalidity

Species

The members of the other two bodies ( Management Board and Supervisory Board ), wherever possible participate in the general meeting ( § 118 para 2 AktG ( German Stock Corporation Act ) ). Regulated by law are of two types, namely, the ordinary and extraordinary general meeting. Legal basis in Germany, § § 118 to § 147 AktG.

Annual General Meeting

The Annual General Meeting (including annual general meeting; . Eng Annual General Meeting ( AGM) ) takes place ( § 120 paragraph 1 sentence 1 AktG ) at least once a year. Voters attending the General Meeting, all holders of common shares of a company.

During an ordinary general meeting basic business decisions are taken, such as the election of the members of the Supervisory Board, amendments to the statutes, and the distribution of profits in the form of a dividend. Important item on the agenda is the discharge of the Supervisory Board and the Management Board. The Annual General Meeting elects the auditors usually. Generally, resolutions are passed by a simple majority of the votes cast, provided it does not concern decisions of special importance. These include:

• Rules of Procedure of the General Meeting ( § 129 paragraph 1 sentence 1 AktG),
• Amendments ( § 179 paragraph 2 sentence 1 AktG),
• Capital increase ( § 182 paragraph 1 sentence 1 AktG),
• Exclusion of subscription rights § 186 Paragraph 3 Sentence 2 AktG),
• Dissolution of the company ( § 262 paragraph 1 No. 2 AktG) or
• Restructuring and corporate contracts (eg § 65 Paragraph 1, § 73, § 125, § 135, § 176, § 179 Transformation Act; § 293, § 295 or § 319 paragraph 2 sentence 2 AktG).
• The Federal Court also sees a responsibility of the HV for structural of paramount importance.

In these cases, the Stock Corporation Act requires a quorum of at least 75 percent of the present at the vote share capital, in the Articles of Association of the Company other majorities can be determined ( with the exception of the Supervisory dismissal ).

Extraordinary General Meeting

The Extraordinary General Meeting (English Extraordinary General Meeting ( EGM ) ) does not annually but special invitations due to special events are held. Such occasions can be, for example, unexpected events such as acquisitions / mergers or necessary capital.

Technical management of general meetings

Convocation

According to § 121 AktG, the Annual General Meeting shall be convened by the Board. Authorized are board members who are registered in the Commercial Register as a board. The meeting must be convened time and place of the Annual General Meeting and the agenda included. For listed companies, the Board shall specify in particular the conditions for attending the meeting and to exercise voting rights and, where appropriate, the record date pursuant to § 123 Section 3 Sentence 3 AktG and its importance in the notice. Then, the Executive Board at least 21 days before the meeting the credit institutions and the associations of shareholders who exercised at the last AGM voting rights for shareholders or who the message requested to inform the convening of the Annual General Meeting ( § 125 AktG).

Completion

The technical organization of general meetings of listed stock companies with bearer shares (sending annual reports and invitations as well as the administration of the voting rights) is up in Germany the custodian banks, as companies do not know their shareholders ( holders of registered shares are known to the company by the shareholders' register and from this directly informed). The shareholder has the choice to forfeit his right to vote, to represent it himself or to transfer it by proxy of the bank or to its representative ( eg, a club which is to represent the rights of shareholders ) ( proxy voting rights ). Decides the shareholder to exercise his voting rights, the shares of the company have to a certain date ( the "Record date" ) are in the account of the investor. This is a new regulation, which finds application in § 123 AktG since 1 November 2005. The 21st day before the Annual General Meeting is set as the " record date ". The entry deadline for the exercise of the voting rights or power of attorney is now the 7th day before the meeting. What happens in the time between the "Record Date" and the date of the Annual General Meeting, is irrelevant to the right to participate. A side effect is that the shareholder to sell his shares, but still go to the General Meeting or to exercise his vote by wire transfer. Who buys shares after the record date, has no right to participate; but he gets the dividend after the AGM. With the new regulation, especially foreign investors facilitated the exercise of voting rights, their presences have this improves substantially.

By the year 2005, the shares were locked in the depot until the end of the AGM so that an otherwise possible transfer did not result in an increase in the voting rights to another.

Limiting the duration Assembly

The Federal Court has held on 8 February 2010 that General Meetings at 22.30 clock from the chairman of the meeting may be terminated by the end of the debate, when then are still present proposals to the vote. The Senate considered it permissible to discuss a common agenda in six hours at the meeting. This period may be extended to ten hours, if still minority applications were sought.

In addition, the chairman of the meeting has been granted the right to limit the time a shareholder to 15 minutes. If still have made a speech application to speak at least three other speakers, the chairperson may limit speaking time to ten minutes. Maximum speaking time a speaker may not exceed 45 minutes.

The breakdown of the time budget for the debate of the shareholders, the chairman has always to take into account in exercising its discretion the specific circumstances. If that would not be observed, the decisions could lead to an act of arbitrariness. The chairman had to be guided by the precepts of objectivity, proportionality and equal treatment. These principles should not have been listed in the Articles of Association of the Company.

The Senate referred in his decision on the Law on Company Integrity and Modernization of the Right to Appeal. In § 131 AktG, a restriction of speech and the right to ask questions is provided which may be included in the Articles of Association of the Company.

Nullity of AGM resolutions

Law and case law provide for the possibility that individual decisions of an HV or even the entire HV may be void, ie from the beginning to develop any legal effect. In the central provision of § 241 AktG is first made on six grounds for invalidity in stock law, while after six other grounds for invalidity are listed.

Reference to other grounds for invalidity

For example, reference is made to the decision on a conditional capital increase; should this conflict with the decisions of an HV, they are null and void ( § 192 para 4 of the AktG ). In § 212 AktG is determined that new shares to the shareholders entitled to in proportion to their shares in the former capital and a contrary decision by a HV is void. Vain are also decisions on capital increases and reductions, if they have not been entered in the register since the resolution within six months ( § 228 para 2 AktG).

My grounds for invalidity

In particular, an entire HV is void if it was not convened in accordance with the requirements of § 121 para 2 and 3 of the AktG ( convened AGM always requires Management ). Lack the required pursuant to § 130 para 1 and 2 AktG notarization of individual AGM Resolutions (it is a HV transcript to manufacture ), the law wants their nullity. The enumerated grounds for annulment is final ( " only void " ), so could not be extended.

The really trivial decisions can be cured in many cases, according to § 242 German Stock Corporation Act, if they have been entered in the commercial register and have passed at least three years since then.

Contestability of HV decisions

In addition, the Act provides in § 243 AktG in a variety of cases, the contestability of HV decisions before. The combined AGM Resolutions are in effect until they have been challenged legally. The action for annulment shall be directed to a violation of law or a breach of the statute by AGM Resolutions. In particular focuses § 243 AktG 4 on the incorrect, incomplete or refused issuance of information when an objectively judgmental shareholder would have considered the issue of information as an essential prerequisite for the proper discharge of its participation and membership rights. This is information breaches of duty by the board, which collide with the Right of Shareholders of § 131 AktG.

This general standard has been substantiated by a number of decisions by the Supreme Court. He pointed out that the withholding of information that are the shareholder for his role in the resolution of the general meeting essential is a contestable process. Should the Board pursuant to § 119 para 2 AktG in a management matter, the decision of the general meeting, he shall give her the information she needed for proper decision-making. Decisions concerning the discharge of the Executive or Supervisory Board may be challenged when these organs are clearly meets a serious law or statutory violation.

The annulment of decisions of the Annual General Meeting is an important instrument of protection for shareholders. However, it was often abused in the past by " predatory shareholders ". The wants to work with court approval process since May 2009 the law. This allows the registration of a shareholders' resolution in summary proceedings in the Commercial Register, although it has been subject to a legal challenge against the decision (§ § 246a, § 319, paragraph 6, § 327e AktG and § 16 para 3 Transformation Act ). Thus, the aim is to shorten the duration of the release procedure, because the principal " blackmail potential " (BMJ ) lies in a long time '. For approval process of this type ( § 246a paragraph 1 sentence 3, paragraph 3 sentence 4 AktG) is now in first and last instance, the OLG responsible.