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The General Meeting

Convention of the General meeting of shareholders, taking into account the entry into force of the law «On Joint Stock Companies»
The procedure of convening and holding of the General meeting of shareholders according to the Law «On Business Associations»
The procedure of convening and holding of the General meeting according to the Law «On Joint Stock Companies»
 Participation of shareholders in the General meeting
Conducting of the general meeting
Voting procedure
Ballot papers
Voting results
Breaks in the general meeting
Results of the general meeting
Extraordinary General Meeting
Remote survey
Some features of the JSC created by the one person

Convention of the General meeting of shareholders, taking into account the entry into force of the law «On Joint Stock Companies»

The new Law «On Joint Stock Companies» approved a new procedure of convening and holding of the General meeting of shareholders.

However, it is important to notice that the SEC in its clarification of 14.07.2009, № 8 indicated that JSC should act according to the Law of Ukraine «On Business Associations» before the time

of its complying the Charter and other internal regulations, with the norms of the Law of Ukraine «On Joint Stock Companies». By the same legislative acts relations between company and shareholders, investors, public authorities and others are governed.

So, the procedure of convening and holding of the General meeting of shareholders, where will be decided to make an alterations to the Charter of the JSC according to the provisions of the new Law, should be regulated by the norms of the Law «On Business Associations».

 

The procedure of convening and holding of the General meeting of shareholders according to the Law «On Business Associations»

The previous procedure of convening and holding of the General meeting of shareholders is as follows.

The General meeting of shareholders shall be convened not less than once a year, unless otherwise is provided by the Charter of Company.

An Extraordinary  Meeting of shareholders shall be convened in case of insolvency of the Company, as well as under the circumstances stipulated in the Company’s Charter, and in any other case, required by the interests of the JSC in a whole.

An Extraordinary Meeting must be convened by the executive body of the Company at the written request of the Supervisory board or audit committee. An Executive body must decide to convene an Extraordinary Meeting including agenda, proposed by the Supervisory board or audit committee within 20 days since a day of receiving an application.

Shareholders who has in total more than 10 percent of the votes are entitled to call an Extraordinary Meeting at any time and for any occasion. If the Board within 20 days failed to meet the request of shareholders to convene an Extraordinary General meeting they have the right to convene the meeting themselves.

The General meeting of shareholders is held in Ukraine, as a rule, according to the location of the JSC, except when on the day of General meeting 100 percent of shares is owned by the foreigners, stateless persons, foreign legal entities and international organizations. The Executive body or registrar usually carries on organization of the General meeting.

Notice of General meeting, indicating the time and place of meeting and agenda, should be published in local newspapers at the location of the Company and in the official publication of the Verkhovna Rada of Ukraine ("Voice of Ukraine) KM Ukraine ("Governmental Courier") or the State Commission on Securities and Stock Market not later than 45 days before the General meeting. Holders of registered shares of the General meeting of shareholders should be notified personally by the way provided by the Charter of the Company (usually by the letter describing the attachment and return receipt).

Not later than 30 days before the General meeting any of shareholders has the right to make their proposals on the agenda of the General meeting. The decision about the including these proposals on the agenda is adopted by the Executive body of the Company. The agenda is sure to include the proposals of shareholders, who holdes more than 10 percent of the votes.

All of the shareholders must be informed about the decision on changing the agenda not later than 10 days before the General meeting by the way provided by the Charter of the Company.

Shareholders must be given the opportunity to learn the documents related to the agenda before the convening of the General meeting.

The Executive body of the JSC or the registrar under the contract concluded with him registrates the shareholders (their representatives) who came to participate in General meeting, in accordance with the register of shareholders on the day of General meeting. This register is  signed by the Chairman and Secretary of the Meeting.

A shareholder has the right to participate in Meeting personally or to appoint his/her representative for participation in the Meeting by proxy.

Shareholders who hold in total over 10 percent of the vote, and / or SEC can appoint their representatives to control the procedure of the registration of shareholders. They should inform the Executive body of the JSC before the beginning of the registration in written.

The General Meeting of a joint stock company shall have a quorum on condition of registration of shareholders for the participation in the General Meeting who shall jointly hold at least 60 percent of voting shares.

The General meeting by a majority not less than 3 / 4 votes of shareholders participating in Meeting decides of: • Amendments to the Charter of the Company; • liquidation of the Company.

For other questions it decides by a simple majority of votes (more than 50 percent of the votes of shareholders) who participate in General meeting.

There are Minutes of the General meeting of shareholders signed by the Chairman and Secretary of the Meeting, which should be given to the Executive body of the JSC not later than three business days after the Meeting.

 

The procedure of convening and holding of the General meeting according to the Law «On Joint Stock Companies»

Procedure of convening the General meeting

The law «On Joint Stock Companies» provides another order.

JSC is obliged to convene the Annual General meeting, which shall be held not later than April 30 of the year following the reporting year.

The General meeting of shareholders is held in Ukraine, as a rule, according to the location of the JSC, except when on the day of General meeting 100 percent of shares is owned by the foreigners, stateless persons, foreign legal entities and international organizations.

The shareholders are informed about the time, place of Meeting and agenda in written.

Writing notice of the General meeting, indicating the time and place of meeting and Agenda, should be sent by the way, provided by the Charter of the Company, not later than 30 days before the General meeting by the person who convenes the Meeting. Usually it is sent by the letter describing the attachment and return receipt.

Moreover, the Company, which consists of the shareholders - owners of ordinary shares more than 1000 persons, also publishes in the official publication the notice of the General meeting not later than 30 days before the General meeting.

Public JSC additional sends a notice of the General meeting and the agenda to the stock exchange at which this Company has passed a listing procedure.

У разі реєстрації акцій на ім'я номінального утримувача повідомлення про проведення загальних зборів та порядок денний надсилається номінальному утримувачу, який забезпечує персональне повідомлення акціонерів, яких він обслуговує.

The notice of General meeting and the agenda is sent to the nominee, who provides a private informing the shareholders which he serves, in the case of registration of shares on the name of nominee.

The Notice must include:

1) the full name and the location of the Company;

2) date, time and place (with number of rooms, office or hall, where shareholders have come) of the General meeting;

3) the start and end of the registration of participation of shareholders in the General meetings;

4) date of making the list of shareholders entitled to participate in the General meetings;

5) list of issues submitted to vote;

6) the procedure of learning the materials by shareholders which they can learn during the  preparation for the General meeting.

 

 Participation of shareholders in the General meeting

The agenda of the General meeting previously is adopted by the Supervisory board of the Company, and in case of convening of extraordinary general meeting on request of the shareholders - the agenda of the General meeting will be adopted by such shareholders. If the Supervisory Board is absent the Executive body of the Company will perform its functions.

A shareholder can participate in the General meeting personally or can appoint a representative acting by the power of attorney.  The power of attorney for the right to participate and to vote at the General meeting may be verified by a registrar, a depositary, a custodian, a notary, and other officials who can commit notarial acts.

Registration of shareholders (their representatives) is based on the list of shareholders entitled to participate in the General meeting.

The registration committee appointed by the supervisory board registrates shareholders, in the instance of convening an extraordinary General Meeting upon request of shareholders – by shareholders who will request such a meeting. Registration committee’s authorities under the contract can be transferred to registrar or depository of the Company.

The list of shareholders registered for the participation in the general meeting is signed by the chairmain of the registration committee.

Shareholder, who is not registered, has no right to participate in the general meeting.

The list of shareholders, registered for the participation in the generel meeting, is attached to the minutes of the general meeting.

The General Meeting of a joint stock company shall have a quorum on condition of registration of shareholders for the participation in the General Meeting who shall jointly hold at least 60 percent of voting shares. The geristration commettee makes a decision on quorum at the end of registration of shareholders.

 

Conducting of the general meeting

The general meeting begins not earlier than specified in the notice of the general meeting.

The order of condacting of the general meeting is established by the charter of JSC, if it isn’t established by the charter of JSC -  by the general meeting.

The chairman of the general meeting is the chairman of the supervisory board, supervisory board’s member or other person authorized by the supervisory board, if otherwise isn’t provided by the charter. If there is no supervisory board - the chairman can be appointed by the meeting itself.

The procedure of the general meeting or of making decision on issue can be fixed by the texnical means, entries are added to the minutes of the general assembly.

 

Voting procedure

One ordinary share of a joint stock company shall give a shareholder one vote to resolve each issue at the General Meeting, except for the instance when a cumulative voting is held.

Shareholders holding ordinary shares of a joint stock company have right to vote.

Shareholders of privileged shares of one class of a joint stock company can have right to vote in the following cases:

1) terminating the joint stock company, that provides conversion of privileged shares of that class in another class of privileged shares, ordinary shares or other securities;

2) introducing amendments to the Charter of the joint-stock company that provides restrictions of the rights of shareholders - owners of this class of privileged shares;

3) introducing amendments to the Charter of the joint stock company that provides placing of the new class of privileged shares, which owners would have priority to dividends or payments in the case of liquidation of the company, or increase of shareholder’s rights - owners of plased classes of privileged shares that have priority of order of the receiving the dividends or payments in the case of liquidation of the company.

4) other issues that can be provided by the charter of the private company. In public company voting right is given to owners of preferred shares exceptionally on issues mentioned above. When you change the joint-stock company from public to private, giving right that wasn’t provided for shareholders of privileged shares of public company by law stops.

Decision of a general meeting adopted with the participation of the shareholders - owners of privileged shares, is considered to be approved if three quarters of the shareholders of privileged shares, from those who voted on this issue, vote «for». The requirement of more votes of the shareholders of privileged shares which is necessary for making a decision can be provided by the charter of the company with the number of 25 shareholders and less.

If holders of ordinary shares participate in the general meeting, the decision of the general meeting is adopted by the simple majority of the shareholders who have registered to participate in the general meeting, except of cases described below. More votes needed for making a decision, except for: 1) termination of powers pre-term of the officials of the company; 2) to claim for damages caused to company to the officials of the company; 3) to claim in case of inobservance requirements of this law while committing significant transaction.

More than three fourths of the total number of votes of the shareholders can decide on 1) introducing amendments to the Charter of the joint-stock company; 2) withdrawing redeemed shares; 3) changing the type of the joint stock company; 4) placing shares; 5) increasing and decreasing the authorized capital of the joint stock company; 6) separating and terminating the joint stock company (except if more than 90 percent of the ordinary shares of the company that joins belong to the joint-stock company to which the company joins), on liquidating the joint stock company, on electing the liquidation commission, on approving the procedure and deadlines for liquidation, the procedure for distributing the property that shall be left after claims of creditors have been satisfied among shareholders, and approving the liquidation balance sheet.

These candidates who scored the most number of votes among those who scored more than 50 percent of the vote are considered to be elected to the composition of the body of the JSC.

The votes are counted together with all the voting shares of the issue that was set for a vote, unless otherwise isn’t provided by the charter of the company.

The general meeting can’t make decisions on issues don’t approved on the agenda.

 

Ballot papers

According to the Law «On Joint Stock Companies» voting at the general meeting can be conducted using ballots.

Using ballots is required:

- in public joint-stock company;

- irrespective of the type of the company while making a decision on obligatory buying out shares by the company on the request of the shareholders.

The ballot papers must consist of:

1) full name JSC;

2) date and time of the general meeting;

3) list of issues to vote, and drafts of the decisions on these issues;

4) versions of voting for each draft of the decision (descriptions «for», «against», «abstained»);

5) warning that a ballot must be signed by the shareholder (a shareholder representative) and if the ballot isn’t signed by the shareholder it will be considered as invalid;

6) number of votes belonging to each of the shareholders;

7) surname, name and patronymic of the candidate (candidates) while voting for the election of the executive body, the supervisory board or audit committee (auditor).

The form and the text of the ballot paper shall be approved by the supervisory board (non - executive authority) not later than 10 days before the general meeting, and if the extraordinary general meeting is convene on the request of the shareholders – by the shareholders who require for that.

The ballot paper will be declared invalid if it differs from a sample officially issued by the JSC or it isn’t signed by the shareholder (a representative).

If the ballot contains several issues to vote, declaring it invalid on one of the issue will be the basis for the invalidation of other issues.

Invalid ballots won’t be taken into account during the counting.

 

Voting results

Counting of votes, explanation of the procedure of voting and other issues which are connected with the ensuring of condacting of the general meeting is charged on countable committee which is elected by the general meeting of shareholders. Counting Commission’s authority under the contract can be transferred to registrar or depository of the company.

The minutes, signed by all members of the counting committee, who participated in the counting of votes, or representative of the registrar / depositary is drawed after the voting.

The date of general meeting, a list of questions of which the decision was adopted, the decisions and the number of votes «for», «against» and «abstained» each draft of the decision on each issue are indicated in the minutes.

The decision of the general meeting is considered to be adopted from the moment of drawing the minutes of voting results.

Voting results are announced during the general meeting at which the voting was conducted. Shareholders are informed about voting results within 10 working days in the way determined by the charter of the company after closing the general meeting.

The minutes of voting results is added to the minutes of the general meeting.

 

Breaks in the general meeting

The break can be announced during the general meeting until the next day. The decision on the announcement of a break for the next day is taken by the simple majority of the shareholders who have registered to participate in the general meeting and are the holders of shares voting at least on one issue that will be considered the next day. The next day there is no re-registration of the shareholders (their representatives).

The general meeting is conducted at the same place that is mentioned in the notification of the general meeting.

The number of breaks can’t be more than three during the general meeting.

 

Results of the general meeting

The minutes of the general meeting is drawed within 10 days after the general meeting, which is signed by the Chairman and Secretary of the General Meeting

There are requirements for the minutes of the general meeting unlike the previous law. The minutes of the general meeting should include:

1) date, time and place of the general meeting;

2) date of drawing the list of shareholders, entiteled to participate in the general meeting;

3) total number of persons included in the list of shareholders entitled to participate in the general meetings;

4) total number of votes of shareholders - holders of voting shares that have been registered to participate in the general meeting (if some shares give rights to vote not on all the agenda issues - the number of voting shares of each issue);

5) quorum of the general meeting (if some shares give rights to vote not on all the agenda issues - a quorum of the general meeting of each issue);

6) the Chairman and Secretary of the general meeting;

7) the composition of the Counting Commission;

8) the agenda of the general meeting;

9) main thesis;

10) the procedure of voting at the general meeting (open, ballots, etc.);

11) results of voting, including the results of voting on each issue of agenda of the general meeting and decisions adopted by the General Meeting.

Minutes of the General Meeting, signed by the chairman and secretary of the general meeting, is filed, sealed and signed by the chairman of the executive body of the company (in case of collective executive body) or by the single executive body.

 

Extraordinary General Meeting

As mentioned above, JSC can convene an extraordinary general meeting. It is convened by the supervisory board:

1) on its own initiative;

2) on the request of the executive body - in case of violation proceeding on the procedure of recognizing the company bankrupt or necessity of committing significant transaction;

3) on the request of the Audit Committee (Auditor);

4) at the request of shareholders (shareholder), which a day requesting collectively owning more than 10 percent of ordinary shares;

5) in other cases established by the law or charter of the company.

It is important to now, that in the case of supervisory board’s absence convening of the general meeting relies on the executive body of the company.

Requirement of convening an extraordinary general meeting shall be submitted in writing to the executive body to the address of the location indicating the body or the names (titles) of shareholders, who require convening of the extraordinary general meeting, reasons of convening and agenda. The requirement must also contain information of number, type and class of shareholders’s shares and must be signed by all shareholders who submit it If shareholders require the convening of the extraordinary general meeting.

The Supervisory Board decided to convene an extraordinary general meeting or to refuse such convening within 10 days since the moment of receipt the requirement.

Decision on refusal convening of extraordinary general meeting will be taken only if:

  • if shareholders don’t hold the required number of ordinary shares at the date of requirement’s submission
  • if information contained in request isn’t complete.

The Supervisory Board’s decision is submitted to the relevant management body or shareholders of the company, who require convening of it, not later than within three days since a day of its adoption.

The Supervisory Board has no right to make alterations in the agenda of the general meeting which is contained in the request of convening an extraordinary general meeting, with the exception of including new issues or drafts of the decisions in the agenda.

An extraordinary general meeting should be held within 30 days since date of requirement of their convening.

The supervisory board can decide to convene an extraordinary general meeting without right of shareholders to propose issues on agenda if it is necessary for company. The written notice of extraordinary general meeting and agenda should be sent to shareholders not later than in 15 days before the date of its convening. If the agenda of extraordinary general meeting includes issues of electing members of the supervisory board the Supervisory Board won’t have such right.

In this case, in the absence of a quorum of an extraordinary general meeting second general meeting isn’t condacted.

If the supervisory board decided not to convene an extraordinary general meeting during the determined period, such meeting can be convened by the shareholders who require for it.

The decision of the Supervisory Board to refuse convening an extraordinary general meeting of shareholders can be appealed to the court.

If the general meeting is convened by the shareholders, notification and other materials are sent to shareholders of the company by the person who keeps tabs on ownership of shares of the company.

 

Remote survey

There are certain features of convening the general meeting in special cases stipulated by the law, including general meeting in the form of remote voting and meeting with one shareholder.

Decision can be made by the remoute survey if number of the shareholders does not exceed 25 persons and only in cases stipulated by the charter of the company.

In this case, a draft of the decision or issue to vote is sent to shareholders - holders of voting shares, who must inform in written about their opinion of it. Within 10 days since a day of receipt of the notice from the last shareholder - holder of the voting shares all of shareholders - holders of voting shares must be notified in writing by the chairmain of the general meeting about the adopted decision. The decision would been adopted if all of shareholders - holders of voting shares voted for it.

 

Some features of the JSC created by the one person

Norms of the law of the procedure of convening and holding general meeting won’t rigidly to the JSC if it is composed of one person.

Powers of the general meeting are carried out solely by shareholder.

Decision of shareholder on issues belonging to the competence of the general meeting is executed by him in writing (order form) and sealed by the company or notarized.

Election of Members of the Supervisory Board, the Audit Commission (in case of its creation) is realized without cumulative voting.

 
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