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Corporate

Companies should remember this at their general meeting

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Legal news
calendar 22 February 2021
globus Denmark

Every year, all companies hold an ordinary general meeting where important decisions about the company are made. For most companies, this is simply a matter of drafting the documents, but there are a few important requirements that must be met. Here is an overview of the most important points companies should have in place before, during, and after the annual general meeting.

Public and private limited companies must hold at least one general meeting every year. The general meeting must be held no later than five months after the end of the financial year. In other words, if the financial year follows the calendar year, the general meeting must be held no later than 31 May the following year.

Before the general meeting

If the company has a board of directors, a board meeting must be held before the general meeting where the board of directors decides which items are to be included on the agenda. If there is no board of directors in the company, the management prepares the agenda for the general meeting. It is important to keep minutes of the board meeting.

In most cases, general meetings must be convened with a minimum notice of four to two weeks before the meeting is to be held. The convening notice must contain the time, place, and agenda for the general meeting and if amendments to the articles of association are proposed, the convening notice must also contain the draft amendments.

Although there are a few requirements in the Danish Companies Act (selskabsloven) and perhaps also in the company’s articles of association, it is to a large extent possible to deviate from these requirements. To deviate from the application form and time requirements, the capital owners simply must agree to do so. If you own a company alone, you can therefore rather easily hold a general meeting without following the requirements that are usually applicable.

Online og physical meeting?

Due to the new coronavirus, it is relevant to consider whether the general meeting should be held online. If a company chooses to host the general meeting online, the company must be aware that if a shareholder refuses to host the meeting online, the meeting must be held physically. However, the rule only applies if the shareholder owns more than 10 percent of the company.

At online general meetings, participants should be told in advance how to tune in to the meeting. It is important that the general meeting is hosted in a safe manner in order to ensure that all participants can speak and vote as they would at a physical meeting.

The agenda

According to the Danish Companies Act, the following items must be included in the agenda at the general meeting:

  • Election of chair
  • Approval of the annual report
  • Distribution of profits or settlement of loss

In addition to the mandatory items, some optional items can be included in the agenda. These include the election of a new auditor, capital increase, capital reduction, changes in the central management, changes in the articles of association, and possible opting out of auditing for annual reports for smaller companies.

It is a requirement that companies annually check and update registered information about the company's beneficial owners. Therefore, companies may choose to include the control of beneficial owners to the agenda at the annual general meeting so that the company can ensure that the control is carried out at least once a year.

It is also important to remember that the company's shareholders have the right to put items on the agenda.

After the general meeting

After the general assembly has been held, minutes of the meeting must be written. As of 1 January 2021, companies are required to store such documents for a minimum of five years. We have previously described the new requirements here.

Companies should be aware that certain changes must be notified to the Danish Business Authority. This will be the case, for example, if new articles of association are adopted at the annual general meeting, if there are changes in the members of the board or if the company appoints a new auditor.

IUNO’s opinion

Before the annual general meeting, IUNO recommends that the management goes carefully over the applicable requirements, so as not to risk fines for faulty or omitted items on the agenda. Another reason to ensure that the requirements are met, is to make sure all decisions made at the meeting will be valid.

If a company chooses to host the annual general assembly online, IUNO recommends that the company makes sure to guide the participants thoroughly before the meeting to avoid technical problems during the general meeting. The person chosen as chair should also be able to handle any technical problems that may occur.

As a general guideline, other types of companies, like associations and limited partnerships, should also follow the rules for public and private limited companies.

Public and private limited companies must hold at least one general meeting every year. The general meeting must be held no later than five months after the end of the financial year. In other words, if the financial year follows the calendar year, the general meeting must be held no later than 31 May the following year.

Before the general meeting

If the company has a board of directors, a board meeting must be held before the general meeting where the board of directors decides which items are to be included on the agenda. If there is no board of directors in the company, the management prepares the agenda for the general meeting. It is important to keep minutes of the board meeting.

In most cases, general meetings must be convened with a minimum notice of four to two weeks before the meeting is to be held. The convening notice must contain the time, place, and agenda for the general meeting and if amendments to the articles of association are proposed, the convening notice must also contain the draft amendments.

Although there are a few requirements in the Danish Companies Act (selskabsloven) and perhaps also in the company’s articles of association, it is to a large extent possible to deviate from these requirements. To deviate from the application form and time requirements, the capital owners simply must agree to do so. If you own a company alone, you can therefore rather easily hold a general meeting without following the requirements that are usually applicable.

Online og physical meeting?

Due to the new coronavirus, it is relevant to consider whether the general meeting should be held online. If a company chooses to host the general meeting online, the company must be aware that if a shareholder refuses to host the meeting online, the meeting must be held physically. However, the rule only applies if the shareholder owns more than 10 percent of the company.

At online general meetings, participants should be told in advance how to tune in to the meeting. It is important that the general meeting is hosted in a safe manner in order to ensure that all participants can speak and vote as they would at a physical meeting.

The agenda

According to the Danish Companies Act, the following items must be included in the agenda at the general meeting:

  • Election of chair
  • Approval of the annual report
  • Distribution of profits or settlement of loss

In addition to the mandatory items, some optional items can be included in the agenda. These include the election of a new auditor, capital increase, capital reduction, changes in the central management, changes in the articles of association, and possible opting out of auditing for annual reports for smaller companies.

It is a requirement that companies annually check and update registered information about the company's beneficial owners. Therefore, companies may choose to include the control of beneficial owners to the agenda at the annual general meeting so that the company can ensure that the control is carried out at least once a year.

It is also important to remember that the company's shareholders have the right to put items on the agenda.

After the general meeting

After the general assembly has been held, minutes of the meeting must be written. As of 1 January 2021, companies are required to store such documents for a minimum of five years. We have previously described the new requirements here.

Companies should be aware that certain changes must be notified to the Danish Business Authority. This will be the case, for example, if new articles of association are adopted at the annual general meeting, if there are changes in the members of the board or if the company appoints a new auditor.

IUNO’s opinion

Before the annual general meeting, IUNO recommends that the management goes carefully over the applicable requirements, so as not to risk fines for faulty or omitted items on the agenda. Another reason to ensure that the requirements are met, is to make sure all decisions made at the meeting will be valid.

If a company chooses to host the annual general assembly online, IUNO recommends that the company makes sure to guide the participants thoroughly before the meeting to avoid technical problems during the general meeting. The person chosen as chair should also be able to handle any technical problems that may occur.

As a general guideline, other types of companies, like associations and limited partnerships, should also follow the rules for public and private limited companies.

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Aage

Krogh

Partner

Matilde

Grønlund Jakobsen

Associate

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Powers Bates

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Grønlund Jakobsen

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