21 Jun FORMALITIES REGARDING THE CALL OF THE GENERAL MEETINGS
By the times June comes around, within the world of the so-called Capital Companies begin to sound continuously concepts such as “General Meeting”. But what are the so-called General Meetings?
In the mercantile field, the General Meeting consists on the meeting of the social capital of a company with the aim of taking a series of decisions established in the law or in the company’s own bylaws.
The Capital Companies Act indicates in its article 163 the existence of different types of board, differentiating between Ordinary Boards and Extraordinary Boards.
The ordinary boards are those that necessarily have to be met within the six first months of each year, to approve, if it were the case, the social management, the accounts of the previous year and decide on the application of the result.
As a general rule, outside the cases of the so-called Universal Board, which does not require prior notice, the meeting must be preceded by a notice of the call.
Who has the Obligation to convene?
The competence to convene is attributed, in general, to the directors of the companies and, in the event that the liquidation period has begun, to the liquidators that have been appointed.
Could the partners themselves convene the General Meeting?
The answer is negative because they are not authorized in any case to validly convene the general meeting, but they are entitled to request the administrators for such meeting in certain cases assessed in the law.
In order to guarantee the full exercise of the rights of the partners, the LSC itself imposes the obligation that the meeting of the Board shall complies with a series of requirements and formalities that ensure the valid holding of the meeting.
What are these requirements?
They are regulated in Article 173 of the LSC, which provides that “The general meeting will be convened by announcement published on the website of the company if it was created, registered and published in the terms provided in Article 11 bis and in case of not having it, the notice of the call shall be published in the “Official Gazette of the Mercantile Registry” and in one of the newspapers with the largest circulation in the province where the registered office is located.
Nevertheless, the law enables the members themselves to replace it with “any individual and written communication procedure, which ensures the reception of the announcement by all partners at the address designated for that purpose.
Said election must be expressly indicated in the bylaws of the company, because otherwise the provisions of the law shall apply in a supplementary manner.
Content of the notice
In any case, the notice of the call shall state the name of the company, the date and time of the meeting, the agenda on which the matters to be discussed will appear, and the position of the person or persons who make the call. Additionally, and depending on the order of the day, in the call it is necessary to indicate expressly the right of information that have the partners under articles 196 and 272 LSC.
Place of celebration
Except as otherwise provided in the bylaws, the general meeting shall be held in the municipality where the company has its domicile. If the notice of the call does not include the venue, it will be understood that the meeting has been called to be held at the registered office.
Terms between the call and the celebration of the General Meeting
The materialization of the call of the meeting requires the fulfillment of an advertising requirement with minimum advance notice. Thus, between the call of the meeting and the celebration of the same shall necessarily pass a minimum number of days, which will be different in the “Sociedades Limitadas” (15 days) and “Sociedades Anonimas” (30 days).
As legal advisors specialized in corporate law, we would like to underline the capital importance of not to respect these requirements and formalities since the non-observance of them will determine the irregularity of the call and may constitute grounds for nullity of this and the agreements adopted therein, because in general terms those agreements contrary to the law, to the bylaws and those that harm the interest of the company will be susceptible to being challenged.
At Navarro Llima Abogados we have a team of highly qualified lawyers specialized in company law. If you have any question thereon, please do not hesitate to contact us.