The general meeting is the supreme governing body of a company limited by shares and the forum where shareholders exercise their rights. To ensure that its resolutions are legally valid, the meeting must comply with all legal and statutory requirements — particularly concerning the shareholders’ right to representation. This right guarantees that all shareholders, even those who cannot attend in person or online, can still participate through a proxy or independent voting representative. The article explains when this right may be restricted, the meaning of the principle of immediacy, and why survey tools without independent proxies are not suitable for legally compliant general meetings.
The general meeting is the supreme body of a company limited by shares and the forum where shareholders exercise their membership rights. It makes the most important and fundamental decisions. Under the Swiss Code of Obligations (CO), non-listed companies have nine non-transferable powers assigned to the general meeting, while listed companies have thirteen. These powers cannot be delegated to the board of directors, executive management, or the auditors.
The general meeting consists of the shareholders who are present or represented. The convocation, agenda setting, conduct, and follow-up of the general meeting are regulated in detail by the CO as well as by the company’s articles of association. Only if these rules are followed is a general meeting considered legally compliant. Resolutions adopted at meetings that were not properly convened or conducted may be contested or even declared null and void.
Multiple Legal and Statutory Requirements
The specific legal and statutory requirements for a general meeting depend not only on the company’s articles of association but also on the type of meeting — whether physical, virtual, hybrid, universal, or conducted in writing on paper or electronically — as well as on the items on the agenda. Covering all these requirements would go beyond the scope of this article. Therefore, the focus here is on one key aspect: the shareholder’s right to representation.
Swiss law is based on the notion that decision-making should occur through a personal, discursive, and interactive process at the general meeting. This is referred to as the principle of immediacy. Regardless of the form of participation, this immediacy must enable real-time interaction, including in meetings held using technical means.
Principle of Immediacy and Right of Representation
To ensure compliance with this principle, the CO grants each shareholder the right to be represented at the general meeting. The right to speak and ask questions must not be restricted. Moreover, shareholders should be able to cast their votes in an informed manner after meaningful discussion. This applies equally to meetings held via electronic means, as not every shareholder can reasonably be expected to participate online.
Through a proxy or voting representative, shareholders who cannot or prefer not to attend online can still participate effectively and express their views.
Permissible Restrictions on the Right of Representation
The right of representation, which is explicitly regulated in the CO, forms part of the shareholder’s participation rights. It may only be restricted or withdrawn in the following cases expressly provided by law:
- The articles of association may stipulate that representation is only possible through another shareholder. Even in such cases, any shareholder may request that the board of directors appoint an independent voting representative or a corporate representative to whom voting rights may be delegated.
- A general meeting may be held abroad if permitted by the articles of association and if the board designates an independent voting representative in the convocation notice. In non-listed companies, the board may waive this designation, provided that all shareholders give their express consent for each such meeting. This consent must be active and explicit; silence or lack of objection does not suffice.
- A general meeting may be held entirely by electronic means without a physical venue, provided that the articles of association allow it and the board appoints an independent voting representative. For non-listed companies, the articles may permit such a meeting without mandatory appointment of an independent representative.
No further restrictions on the right of representation are permitted.
Conclusion
Returning to the initial question — what makes a general meeting legally compliant? — it can be concluded that, in terms of shareholder representation, general meetings held without a voting representative are not legally compliant, except in the cases expressly provided for by law or the articles of association.
In particular, survey or polling tools that enable online voting do not qualify as legally compliant general meeting tools if they do not allow shareholders to grant proxy authority to at least one independent voting representative. As such tools are increasingly marketed as “legally compliant,” boards of directors would be well advised to verify their compliance carefully before use.
In a personal conversation, we would be happy to show you which functions of the Konsento AGM module will help you with the convening, agenda, implementation and post-processing of your legally compliant AGM. Book an appointment with our experts now!
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