General meeting

What it means

The general meeting is the supreme body of a limited liability company. It consists of the members and decides the matters the law or the founding deed reserves to them rather than to the managing director.

Its powers include approving the annual accounts and the distribution of profit, appointing and removing the director, amending the founding deed, increasing or reducing share capital, and resolving to wind the company up.

The general meeting does not run the business day to day - management belongs to the director. It does set the frame the director acts within, and the founding deed can reserve further matters to it, such as consent to larger contracts, a loan or the sale of assets.

How it works in practice

The director convenes it, normally by written notice within the period set by the founding deed. Minutes are taken, and they are the basis for the accounting entries, for filings with the commercial register and for the tax administrator.

An ordinary meeting is held at least annually because of the accounts, which must be approved within six months of the period end. With a sole member, that member exercises the powers of the general meeting and decides in writing.

Before the ordinary meeting we prepare the papers: the draft accounts, a proposal for distributing profit or covering a loss, and the wording of the resolution. After approval we file the accounts together with the approval details in the register of financial statements, so the public record matches what the members decided.

What to watch out for

A resolution passed without proper notice or without the required majority can be challenged - including a profit distribution, which then has no legal basis. Minutes therefore belong in the company’s archive, not in the director’s inbox.

Some resolutions, typically an amendment of the founding deed, must take the form of a notarial record. A decision written up as ordinary minutes is rejected by the register, and a change the company is already counting on, such as a new seat or business activity, is not entered.