The General Meeting is the body of the company that prepares and expresses the corporate will. It is a necessary and irreplaceable corporate body.
He is the only one who can exercise or perform his duties.
It is defined as the physical meeting of partners, validly constituted, convened according to legal and statutory norms, to debate and make agreements by majority on social issues within its jurisdiction.
In this article, we will explore in depth what the Ordinary General Meeting is, its legal foundations and the essential functions it performs in the business framework.
The Ordinary General Meeting
The Ordinary General Meeting is that meeting that is under obligation to be carried out, which must be carried out at least once a year within the first six months of each fiscal year, that is, before June 30.
Its main purpose is to approve the accounts corresponding to the previous year, ratify the corporate management and determine the application of the results, as established in article 164 of the Capital Companies Act (LSC).
In addition to these fundamental functions, the Ordinary General Meeting may also address decisions related to possible modifications to the bylaws, increases or reductions in capital, transformation, fusion or spin-off, as well as any other matter specified by law or the statutes, as provided for in article 160 of the LSC.
Holding a General Meeting involves the presence of a President and a Secretary, the elaboration of a list of attendees, the realization of deliberations and voting, the writing of the corresponding minutes and the compliance with legal and statutory requirements established.
It is a process that guarantees proper functioning and transparency in decision-making within the entity.
Functions of the General Meeting
The General Meeting is configured as the meeting of partners or shareholders of a commercial company, constituting a democratic space where the rights of participants in decision-making are exercised.
Its nature reflects the participatory and democratic essence that characterizes companies in Spain.
At the general meeting, the partners will decide by the legal or statutorily established majority on the matters that are their responsibility; to which they will be linked.
Possible “legal majorities”:
- At the general meeting, the shareholders shall make decisions on matters within their competence by the majority established by law or by statute, and shall be bound by such resolutions. "Legal majorities" are those agreements without the need for a special majority, following the majority principle.
- According to the provisions of article 198 of the Capital Companies Law (LSC) for limited liability companies, social agreements in general will be adopted by a majority of the votes validly cast, as long as they represent at least one third of the votes corresponding to the shares that make up the share capital.
- For special agreements, such as the increase or reduction of capital and any modification of the corporate statutes, the favorable vote of more than half of the votes corresponding to the shares into which the share capital is divided will be required.
- Additionally, certain matters, such as the authorization of administrators to engage in activities similar to the corporate purpose, the suppression or limitation of the right of preference in capital increases, the transformation, merger, division, global transfer of assets and liabilities, and the exclusion of partners, will require a special agreement, with the favorable vote of at least two-thirds of the votes corresponding to the shares into which the share capital is divided.
Call for the General Meeting
The directors will call the General Meeting with a minimum of 15 days.
In the event that the call is not made within the established period, Any partner can request it (Article 169 of the LSC), submitting the application before him Clerk of the Court of Justice or the Commercial Registrar.
Regarding the form of the call, special attention must be paid to the content of the society statutes (article 173 of the LSC):
- If the statutes do not specify anything about it:
A. If the company has a corporate website registered in the Commercial Registry, the call will be made through an announcement on said page.
B. If the company does not have a website or has not been registered, the call will be made by publication in the Official Gazette of the Commercial Registry and in one of the newspapers with the greatest circulation in the province. - If the form of call is regulated by the statutes, this may be established through written communications that ensure its receipt, such as a certified letter with acknowledgment of receipt, addressed to each of the partners.
The call, unless the statutes provide otherwise, must be carried out in the municipal area corresponding to the company's registered office.
Regarding the content of the call, the following information must be included: the name of the company, the date, the time, the person in charge of making the call and the agenda detailing the matters to be discussed at the Meeting.
Conclusions on What is the General Meeting
In conclusion, the General Meeting stands as an essential pillar in Spanish Commercial Law, reflecting the democratic essence of commercial companies.
Understanding its mechanisms, functions and the legal framework that surrounds it is crucial for all actors involved in the business network, contributing to effective governance and regulatory compliance.
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RRYP Global, lawyers specialized in Commercial law.
