General meeting of shareholders

The general meeting of shareholders is a governing body that only exists in a joint-stock company. A joint-stock company is a capital company with a legal personality. However, it cannot properly operate without its governing bodies. Described below are the tasks of the general meeting of shareholders and the ways in which it operates.

General information on the governing bodies of a joint-stock company

As noted above, a joint-stock company is a capital company regulated by the Code of Commercial Companies and Partnerships. As a rule, its share capital may not be lower than PLN 100,000.00 and it acts through its governing bodies. The governing bodies of a joint-stock company are the management board, the general meeting of shareholders and the supervisory board. The management board is the body that represents the company in relation to third parties and manages its affairs. The supervisory board supervises the company’s operations, including, among others, by assessing its financial statements. The last governing body is the general meeting of shareholders which performs both the supervisory function (e.g. by approving financial statements) and the managerial function, as certain actions taken by the management board on behalf of the company must be pre-approved by the general meeting of shareholders (e.g. a decision on disposal of the enterprise owned by the company).

Powers of the general meeting of shareholders

In principle, the general meeting of shareholders adopts resolutions on the following matters:

  1. approval of the financial statements on the company’s operations for the previous financial year;
  2. approval of the activities of the members of the management board and the supervisory board;
  3. distribution of profit or coverage of loss;
  4. taking decisions concerning claims for damage inflicted to the company with regard to its incorporation, management or supervision;
  5. disposal of the company’s enterprise (or its organised part);
  6. lease of the company’s enterprise;
  7. establishment of a limited property right on the company’s enterprise;
  8. sale or purchase of real property (or shares in real property);
  9. sale or purchase of a perpetual usufruct right (long-term leasehold);
  10. issue of convertible bonds or bonds with pre-emption rights;
  11. issue of subscription right certificates;
  12. purchase of the company’s own shares;
  13. entering into an agreement for the management of a subsidiary by the parent company;
  14. entering into an agreement for the acquisition of assets from the founder or a shareholder of the company for a price exceeding one-tenth of the share capital paid-in, before the end of two years of the date of registration of the company;
  15. use of supplementary and reserve capitals.

Ordinary general meeting of shareholders

The general meeting of shareholders in a joint-stock company may either be ordinary or extraordinary. An ordinary general meeting is convened annually, within 6 months of the end of the previous financial year (a company’s financial year and the calendar year often overlap). An ordinary general meeting passes resolutions on such matters as the approval of the financial statements, the coverage of losses or the distribution of profits and the approval of the activities of the company’s governing bodies in the previous financial year. In public companies, it also adopts resolutions of an advisory nature, providing an opinion on the remuneration report. The list of resolutions to be adopted at a specific general meeting in a joint-stock company may be extended by the company’s governing bodies if required by the company’s operations at a given time.

Extraordinary general meeting of shareholders

An extraordinary general meeting of shareholders may be convened in exceptional circumstances if an approval of the general meeting is required on a specific matter concerning the company’s activity at a given time. Such requirement may result both from the Code of Commercial Companies and Partnerships and the company’s articles of association (the joint‑stock company agreement). Moreover, an extraordinary general meeting of shareholders may be convened by the company’s governing bodies and authorised persons when it is considered appropriate.

Convening the general meeting of shareholders in a joint-stock company

As a rule, the general meeting in a joint-stock company is convened by the company’s management board. Another body authorised to summon the general meeting is the supervisory board. It does so if the management board fails to do it within the statutory time limit. Moreover, if it deems it justified, it may also convene an extraordinary general meeting of shareholders at any time. An extraordinary general meeting may also be convened by the shareholders representing at least half of the company’s share capital or half of the total number of votes in the company. The articles of association (the joint-stock company agreement) may also indicate other entities entitled to convene the general meeting.

Shareholders holding at least 1/20 of the share capital have the power to request that the general meeting be convened by the management board. In such cases, the board must summon an extraordinary general meeting of shareholders within two weeks. Otherwise, the registration court may decide that an extraordinary general meeting be convened by specific persons named in its decision.

Regulations of the general meeting of shareholders

The regulations of the general meeting of shareholders may provide for the rules of convening and conducting the general meeting in a joint-stock company. For example, the regulations may concern such issues as conducting the general meeting in electronic form or by correspondence.

Adoption of resolutions by the general meeting

As a rule, the general meeting of shareholders adopts resolutions by an absolute majority of votes. For certain decisions, the law provides for stricter rules, e.g. a majority of three-fourth of the votes (e.g. for the issue of convertible bonds).

Summary

One of the joint-stock company’s governing bodies is the general meeting of shareholders. It is a body combining supervisory and decision-making functions. The general meeting of shareholders should be convened at least once a year. The procedure for its convening is specified by law. This matter may also be regulated by the company’s articles of association. Some decisions taken by the management board must be pre-approved by the general meeting, otherwise, they will be deemed null and void. Radkiewicz Lawyers Poland offers legal assistance in all matters related to the ongoing operation of a joint-stock company, including proper convening and conducting of the general meetings of shareholders.

Do you have any questions?

Call us!

+48 22 489 52 65

Back to Company formation in Poland