Statutory meeting

Statutory meeting
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Statutory meeting is a mandatory appointment, specified in the statute of the institution or company. Shareholders of a public limited company take part in them. These meetings must be organized not earlier than after a month and at the same time not later than six months after the start of business[1]. Statutory meeting is one of the types of general meetings, next to the ordinary general meetings and extraordinary general meetings.

Functions of the statutory meeting

The statutory meeting performs the following functions[2]:

  • Checking and approving reports as well as determining if all required charges are made and shares are subscribed,
  • Approval of the draft statute and its possible amendments,
  • Selecting first directors and inspectors in the company,
  • Discussing the type of newspaper in which all statements of the company will be published until the first general meeting is gathered.

General rules

Below are some basic rules[3]:

  • At the statutory meeting, there must be present subscribers who own 50 per cent or more of the company's equity capital. If this number is not reached during the first meeting, then two more meetings should be organized. In order for them to occur, there must be a break of at least twenty days from informing about the course and transaction carried out during the last meeting and from publishing this statement in a specific newspaper, to calling a new meeting. The number of participants present at a new meeting is determined based on the presence of at least one-third of the subscribers of the company's share capital. In order for the resolutions adopted to become valid and binding, during voting they must receive positive votes from the holders of two-thirds of the shares. If the number of members of the assembly is not determined during the last, third meeting, it is impossible to establish a company. It is worth adding that all candidates and promoters have the right to participate in the statutory meeting, while each shareholder may cast one vote.
  • Before calling a statutory meeting, the organizers should obtain the opinion of an expert of the Ministry of Justice in writing, if the contribution of one or several promoters is in kind. This is to assess these contributions and attach them to the report prepared for the meeting. If the organizers demanded privileges, they are obliged to give reasons why they would receive them. In addition, they must attach specifically statements to their reports.
  • At the statutory meetings, will be presented reports assessing non-cash contributions. Besides, they will settle the matter of privileges for promoters. Those whose contributions are factual and those who want to get privileges will not be able to vote if their applications are already considered and the share capital brought into the company will not be as it was required.
  • The valuation of the appraiser of the Ministry of Justice is very important, therefore the statutory meeting may approve the valuation of in-kind contributions at a level not higher than proposed by him.
  • Convening a statutory meeting[4]:
  1. In the period not later than fourteen days before the date of the meeting, sending an invitation to subscribers who are already in possession of the shares, and presenting meeting program, the content of issues that will be resolved during the meeting, and which documents will be properly certified by two promoters, an idea for company status.
  2. Creating a list of guests together with their personal data and address, nationality and size of owned shares, which will be accepted by the promoters, but checked on the day and place of the statutory meeting.
  3. When invitations to the meeting and documents are sent to subscribers, the organizers are obliged to send them not less than seven days before the date of the meeting to the Registrar.

Footnotes

  1. B. Pattajoshi 2018, pg. 141
  2. Ibp. Inc. 2015, pg. 74-75
  3. Ibp. Inc. 2015, pg. 75
  4. IBP 2012, pg. 41

References

Author: Angelika Guzik