Shareholders meetings are called general meetings and the law provides for three types. The first is the statutory or founders meeting which is mandatory only for the public company. The second is the ordinary (annual) meeting which must be held once a year and the third is the extraordinary meeting which is held on call. In addition, there are two other species of meetings involving the shareholders. One is a Special meeting' which must be called whenever the rights of holders of preferred shares are to be altered, to enable these shareholders to vote on the intended alteration. The other is called an 'extraordinary session of the ordinary general meeting" and may be called by the board of directors, inspectors, or holders of 20 percent of the company's shares whenever action is required on a matter within the competence of the ordinary meeting at times other than when the ordinary meeting is scheduled to be held.
5.2. Competence of Ordinary Meeting
The ordinary meeting is competent to deal with all of the affairs of the company except those which are expressly within the competence of the statutory and extraordinary meetings. It is expressly required to take action on the following matters:
(1) Review and approval of the balance sheet and profit and loss account and other financial reports.
(2) Review and approval of the directors annual report
(3) Review and approval of the inspectors annual report
(4) Election of directors (if their term has expired) (5) Election of inspector(s) and alternate inspector(s)
(6) Designation of general circulation newspaper in which the company's legal notices will appear.
5.3. Competence of Extraordinary Meeting
The extraordinary meeting is competent to deal with any changes in the Articles of Association or the share capital and dissolution of the company.
The law provides for management of general meetings by a directorate composed of a chairman, a secretary, and two observers. Unless the
Articles of Association provides otherwise, the chairman will be the chairman of the board of directors. The secretary need not be a shareholder but the observers must be.
Written notice for general meetings must be given to the shareholders not less than 10 days and not more than forty days before the date of the meeting and such notice must be published in the general circulation newspaper designated for the company's legal notices. The notice must state the agenda and the date, hour, and place of the meeting. Waiver of these requirements is author4zed whenever all of the shareholders attend the meeting.
The quorum requirement for both the ordinary and extraordinary meetings is more than 50 percent of the shares entitled to vote. If an ordinary meeting fails for lack of a quorum upon the first call, the
Written minutes of all general meetings are required to be made by the secretary of the meeting providing a record of the deliberations and actions taken. The minutes must be signed by the directorate and a copy thereof must be kept at the principal office of the company.
5.12. Filing and Registration of Minutes
Whenever a general meeting takes action on any of the following matters, a copy of the relevant resolution must be filed with the Companies Registration Office for registration in a register (book) maintained by that office:
(1) Election of directors or inspectors
(2) Approval of the balance sheet
(3) Decrease or increase in the capital and any change in the Articles of Association.
(4) Winding up of the company and the manner of liquidation.
5.13. Publication of Minutes
In addition to the filing and registration requirements mentioned in Section 6.12 above, notice of action taken by a general meeting (or by the board) on the following matters is required to be published in the general
circulation newspaper designated by the shareholders and in the Official Gazette:
(1) Election of directors or inspectors
(2) Decrease or increase in the capital and any change in the Articles of Association.
(3) Winding up of the company and name and particulars of the liquidators.
(4) Name and power of the Managing Director
(5) Designation of the newspaper in which all the legal notices of the company will be published.
A general meeting may be adjourned for a period of up to two weeks by the directorate with the approval of the meeting. In such a case, no new notice is required and the quorum requirement for the adjourned session will be the same as for the original session.
5.15. Minority Shareholders Calls
Minority shareholders owning in the aggregate one-fifth (l/5) of the company's shares are entitled to request the board and the inspectors to call a general meeting at any time. If the board and the inspectors fail to call the requested meeting, then the shareholders, themselves, are entitled to call the meeting.