Shareholder approval
Current stock corporation law provides that decisions of the general meeting can be passed in writing on paper or electronically. In contrast to the other types of general meetings, personal participation in written general meetings is not possible.
The written resolution requires that no shareholder requires oral advice. Approval can be given either tacitly by the shareholder taking part in the resolution by approving, rejecting or abstaining. In addition, express consent to the circular route is also possible without active participation in the decision-making process.
Ballot, Universal Assembly and Circular Decision
In the case of written AGM decisions on paper or electronically, a distinction can be made between the so-called ballot and the circular resolution.
The ballot is a written majority vote in which not all shareholders necessarily have to participate. However, the general convening rules for general meetings apply, i.e. the right to apply and a period of at least 20 days to vote must be met. Each shareholder receives the voting documents together with the motions, which they can answer with “yes”, “no” or “abstinence.” In accordance with the forms of resolution provided for by law “on paper or electronically,” the voting options may be printed on a written form or displayed in an electronic voting tool. Depending on whether the vote is carried out on paper or by electronic means, the votes received must be counted manually or electronically (so-called validation resolution) and the result recorded in a corresponding protocol (so-called minutes of validation).
In contrast, a circular resolution is only reached with the express vote of all shareholders. This is a special form of universal assembly. As a result, there is also no need to comply with the convening rules.
In the case of a circular decision, only a ready-made protocol with the anticipated result is sent for signature. This therefore requires that the unanimous acceptance of the request is already known in advance. Voting can take place both in writing, i.e. with a handwritten signature and returning or forwarding the resolution request by post, as well as in electronic form, for example by e-mail or in a PDF file on a central filing system.
Circular resolutions on paper usually refrain from actually circulating the same document for reasons of practicality, so that each shareholder signs a copy of the minutes and sends it back to the company, where the various copies are put together. In the case of electronic circular decisions, this problem is eliminated, as the electronic signatures can be provided in a single file.
No statutory basis required
In contrast to the virtual general meeting, a statutory basis for the written resolution in the general meeting is not required, but recommended: On closer inspection, there are numerous follow-up questions to which the law provides no or no unequivocal answer, in particular regarding the delivery of motions and information to shareholders or the deadlines to be observed for answering the motions.
Documents for registration with the commercial register
As proof of the resolution, the minutes of resolution are submitted to the Commercial Register Office, which, as usual, are signed by the secretary and the chairman of the general meeting. The “written votes” of the shareholders or a circular resolution signed by all shareholders do not have to be submitted to the Commercial Register Office, but are checked by the notary as part of the notarization. The proper composition of the general meeting, the approval of the shareholders as to the type of resolution adopted and the resolution passed must be confirmed by the chairman of the board of directors as part of the notarization. However, they are not checked by the commercial register office.
Conclusion
General meetings with written resolutions are not suitable for companies with many shareholders, because each individual shareholder has the right to veto this form of implementation and to demand oral advice instead. On the other hand, this pragmatic form of general meeting is ideal for smaller joint stock companies and in particular for easily anticipated decisions that must be well documented for formal reasons. For the Board of Directors and shareholders, written general meetings have the advantage that votes can be cast at different times and no proxy is required. A major practical benefit is therefore particularly in Capital increases of early-stage startups before. Written decisions made using electronic means are more efficient than paper ones because no voting sheets need to be sent and counted manually (ballot) or minutes need to be sent and signed by hand (circular resolution). Konsento digitizes the legal tasks of corporate action and offers intuitive, time-saving and legally compliant solutions for general meetings using electronic means. Contact us for a free demo or Sign up hereto test the premium version free of charge and without obligation for 30 days.
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