How to Call a Shareholder Special Meeting by a Shareholder
A shareholders meeting is a meeting of the company’s stockholders where decisions are made before the shareholders to address the market concerns and other issues as outlined by the company’s regulations. The term “meeting” means the members will be facing each other, or it may involve a meeting between important members of the company to hold a debate. However, calling a shareholders meeting does require specific criteria to be met.Guidelines for Calling a Shareholder Special Meeting
The term “shareholders” refers to the people directly involved in the corporation who are participating in the company’s gains or losses. The special meeting aims to enable the shareholders to know the company’s affairs and vote on the management’s recommendations in the proposed resolution. The shareholders are equally essential in the decision-making process.
Shareholder meetings are generally held after the fiscal year-end — that is, after December 31. These meetings are held at the start of every new fiscal year. The rules regulating these meetings typically depend on the country of the company’s establishment.
If a problem cannot wait until the next annual meeting, however, then a special shareholder meeting may be necessary. This occurs relatively often, for example, when a business seeks shareholder support for a deal. The corporation will plan and manage an annual meeting at its convenience, subject to much of the same reporting conditions. Once the meeting is scheduled, the organization schedules a voting date for the meeting, which usually lasts around 30 to 90 days.How Soon Can the Meeting Occur?
Shareholder meetings can be held on short-term notice if the required number of shareholders have agreed to attend the meeting in such a short period of time. This permission must be entered in writing and signed. If a shareholder is unable to join the meeting, then they can vote by proxy by using mail or online services.
A majority of shareholders ought to be present together, though, since shareholders have to decide as a group and not as an individual. A shareholder’s meeting, which takes place at the end of every year, is the best place to have discussions on yearly performance and what changes could positively impact the company.
The board of the business takes all decisions. However, before making the main organizational decisions, management must take the shareholder’s consent. The committee would then call the shareholder’s meeting in order to receive those permissions. The kind of meeting to be convened now depends on the problem to be addressed.What Happens During a Shareholder Special Meeting?
A shareholder’s special meeting can discuss on following matters, among others:
- End of year fiscal reports
- Amendments in the corporation’s articles of incorporation
- Decisions on fusions, purchases, break up, or spin-off
- Discussions related to shares of the company
- Appointing and determining the salaries of the company’s auditors
The company’s by-laws might require any other matter that needs to be resolved only in general meetings. A conference of shareholders must be convened, noted, and properly held. There are basic instructions for what this entails, but all companies are different and depend on their business records. The annual meeting typically will take place on the date and time prescribed by its regulations, and these shall vary for each company.
The only thing on the agenda needs is the board of directors’ election at the annual meeting. Still, additional discussions may be incorporated as long as they are included in the meeting note. The scheduling or the agenda of the meeting must comply with both the state corporate legislation and the company’s by-laws.Are You Thinking About Calling a Special Shareholder Meeting?
Calling a special shareholder meeting does require certain regulations to be followed, and failing to do so can put members at risk of liability. At SAC Attorneys LLP, we are here to answer your questions and help ensure the meeting occurs without legal issues. To learn more, or to set up a free, no-risk consultation with us, please contact us today at (408) 436-0789.