Entrepreneurship & BusinessLegal ResourcesThe General Assembly of LLC

May 12, 20210

What are the rights and duties of the General Assembly of Shareholders?

The General Assembly takes decisions on the following issues:

  • setting business policies;
  • amendments to the statute;
  • distribution of dividend;
  • increase and decrease of capital;
  • appointment and dismissal of administrators;
  • company restructuring and dissolution;
  • adoption of the annual financial statements;
  • remunerations for administrators, auditors and experts;
  • appointment and dismissal of independent auditors and experts;
  • supervising the implementation of business policies by the administrator;
  • representation of the company in court and other proceedings against administrators;
  • approving and regulating the procedures for convening the assembly.

What are the rights and duties of a single-member company? 

In the case of a single-member company, the rights and duties of the general assembly are performed by the single member. All decisions must be entered into a decision register, the data of which may not be altered or deleted.

The following decisions must be registered:

  • investments;
  • adoption of annual financial statements and reports;
  • distribution of profits and coverage of losses;
  • company restructuring and dissolution.

Decisions not registered are null and void.

The company cannot challenge the invalidity of a third party, who has acquired the right in good faith.

When is the General Assembly convened?

The General Assembly is convened by administrators or minority members. It convenes in the cases established by law or by the statute, as well as when the meeting is necessary for the interests of the company. The regular meeting is convened at least once a year.

Also, the General Assembly is convened:

  • if there is a risk that the company does not cover the required liabilities within the next 3 months, based on the annual accounts and the independent auditor’s report;
  • if the company proposes to sell assets with a value higher than 5 percent of the company’s assets;
  • if the company, within the first 2 years after its registration, proposes to buy from a member assets, which have a value higher than 5 percent of the company’s assets.

However, if the purchase of assets worth over 5 percent is made on the stock market or is a daily activity of the company, the general assembly is not convened.

Which is the method of conveying?

The General Assembly is convened by written notice or, if provided by statute,by electronic mail. The notice must contain the place, date and hour of the meeting and be delivered together with the agenda to all members not later than seven days before the scheduled date. In the event that the general meeting is not convened under this procedure, it may take valid decisions only if all company members agree.

How is representation performed in the assembly?

A member can be represented at the General Assembly meeting by another member or another authorized person. Administrators can not represent other members in the meeting. Authorization may be given only for one meeting of the general assembly, which includes subsequent meetings with the same agenda.

What is the quorum needed for assembly decisions?

For decisions requiring an ordinary majority, the general assembly can take valid decisions only if the voting members with more than 30 percent of the shares participate.

For matters requiring a qualified majority, it may make valid decisions only if the members holding more than half of the total number of votes are present.

If the general assembly cannot convene due to lack of quorum, the assembly convenes again no later than 30 days, with the same agenda.

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