Checklist: What to consider when planning an AGM

Key Facts

• Prepare annual report and, if requested (no opting-out), audit report in a timely manner.
• Plan the AGM early and hold it no later than 6 months after the end of the financial year (usually by 30 June, convened by the board of directors).
• In case of planned changes to the articles of association (capital increase, change of domicile, etc.), the texts of the articles of association and a notary public must be organised.
• The invitation to the AGM, including agenda items and motions (with attachments, if applicable), must be received by the shareholders at least 20 days before the date of the AGM.
• Physical, hybrid or virtual AGM must be held with counting of votes and taking of minutes.
• For all the above tasks (excluding annual and audit reports), Konsento software offers simple and managed workflows and templates that lead to massive time and cost savings and effortless legal compliance.

1. Prepare the annual report and, if necessary, the audit report

After the close of the financial year, the annual financial statements, annual report and, if applicable, the consolidated financial statements must be prepared. These must be audited by the auditors, unless the stock corporation has made use of the option to waive the auditors (so-called opting-out). The corresponding audit report must also be obtained in this case.

The board of directors should study the annual report carefully and anticipate possible questions from shareholders and prepare answers to them.

2 Resolution of the board of directors to convene the general assembly

The board of directors is responsible for convening the annual general meeting. The Board of Directors must decide the time, place and, in particular, the agenda and motions of the AGM. The law requires that the ordinary general meeting must be held annually within six months of the end of the financial year.

In order to enable as many shareholders as possible to participate, the date should be defined as early as possible and communicated to the shareholders. This step takes place before and independently of the formal invitation to the AGM. 

3 Organising the venue, access control, vote counter and the notary public

After the Board of Directors has determined the venue, date and time for the AGM, the room must be reserved in due time and access control and counting of votes must be organised in the case of physical or hybrid AGMs. 

In the case of virtual general meetings with a suitable application, there is no need for this effort, as the meeting takes place in the virtual room and access control and counting of votes are taken over by the software. 

If changes to the articles of association are proposed to the general meeting, a notary must also be organised. Software solutions specialising in general meetings remind the board of directors of this when setting up the corresponding agenda items.

4 Invitation to the general meeting

The invitation to the General Meeting can be issued as soon as the preparatory actions listed above have been completed. 

However, it must be received by the shareholders at least 20 days prior to the AGM. It is therefore advisable to allow sufficient time for drafting and dispatch of the invitation. It is also essential to take into account the form of delivery stipulated in the Articles of Association. 

In addition to information on the place, date and time of the meeting, the invitation must also contain the agenda and the motions of the board of directors and, if applicable, of the shareholders. The motions must be worded in an understandable and comprehensible manner and, in the case of amendments to the articles of association, must be in the form required by the notary public for the public certification or by the commercial register for the registration. If there are enclosures, they should be attached to the respective application. 

A lot of time for the wording of agenda items and possibly even costs for the examination by a lawyer or a notary public can be saved if the general meeting is organised with a software specialised in this. If the articles of association allow invitations to be sent by electronic means instead of (registered) post mail, savings can also be made on paper and stampage. This is particularly important for companies with a large number of shareholders. 

5 Power of attorney for representation at the general meeting of shareholders

Participation and voting at the AGM is an irrevocable right of shareholders. In order to ensure that this right is exercised even if shareholders are unable to attend the AGM themselves, the company must send them a power of attorney for representation at the AGM by a proxy and a form for instructing the proxy. At least one of the proxies should be independent of the company’s management and the board of directors. 

Broadly supported decisions through the participation of as many shareholders as possible enjoy a high degree of legitimacy, reduce the risk of disagreements in the future and strengthen the company's corporate governance. The board of directors should therefore make every effort to ensure that as many shareholders as possible can participate in the AGM. However, since very few shareholders have the time to travel to the meeting location during the day, the board of directors should also consider electronic forms of participation. Video conferencing applications allow shareholders to follow the meeting in real time, ask questions and express their opinions. Software specialised for AGMs also allows for electronic voting and automated counting after the discussion. This way, shareholders can form their opinion after an item has been discussed or, if necessary, change it until the item is closed. The broad participation of the shareholders and a well-founded making of opinions are essential characteristics of a well-developed corporate governance and are therefore in the interest of the company.   

If, for example, the general meeting cannot be held physically due to a further worsening of the pandemic situation, information must be provided on the corresponding event format (i.e. virtual or hybrid). This must take place no later than 4 days before the AGM.

6 Receipt of voting instructions

The voting instructions returned by the shareholders must be received by the company or the proxy, but may not be taken not of by the Board of Directors prior to the meeting in order to avoid conflicts of interest and attempts to influence the voting.

7 Counting of votes

During the meeting, the shares represented and the quorums for resolutions must be determined and the voting and election results must be counted and recorded. 

If the vote is cast electronically, the software takes over the counting and documentation of this information. 

8 Minutes

During the meeting, the shares represented and the quorums for resolutions must be determined and the voting and election results must be counted and recorded. 

The publication of these minutes is currently not bound to any legal deadline. This will change with the revised company law, which will come into force on 1 January 2023: from then on, the minutes must be made available to shareholders within 30 days in the case of unlisted companies and within 15 days in the case of listed companies. This is a challenging requirement, especially for non-listed public limited companies, as they often lack the resources to prepare the minutes in addition to their day-to-day business.

If the general meeting is held electronically, and in particular if votes are cast electronically, modern software can prepare the minutes automatically and considerably reduce the time required to prepare the minutes.  

If amendments to the Articles of Association have been adopted, the minutes must be publicly certified by a notary public.

9 Commercial register applications and amendments

If personnel changes or amendments to the articles of association have to be entered in the commercial register, the application should be made promptly. This can either be outsourced to the notary or to an appropriate IT platform.

Conclusion

When organising and conducting a general meeting, the board of directors has to observe numerous formal legal requirements. The amount of time they have to invest in the preparation of the general meeting in the interest of its smooth running is considerable. If amendments to the articles of association are decided, considerable legal costs are added for the wording of the respective agenda items and articles of association texts. Konsento's LegalTech software considerably simplifies the organisation and implementation of general meetings through managed workflows and embedded legal know-how: templates for AGM agenda items, automated dispatch of invitations to shareholders, notaries and proxies reduce the time and effort required to organise the AGM to just a few minutes. And with electronic registration, instruction of the proxy and voting as well as the automated creation of draft minutes, the AGM can also be performed in no time at all. We would be happy to present our solution to you in a personal meeting..