The year begins and commercial companies have a great responsibility to define fundamental aspects such as the balance sheets for the year, distribute profits and ensure compliance with the corporate purpose, all through a single mechanism: the ordinary shareholders’ meeting.
The formalization of any company through a commercial partnership brings with it great advantages and guarantees, both for its partners and for its clients. One of them is precisely the general assembly, which may be of partners or shareholders, depending on the type of company in question. This is not a minor issue, since there are several aspects to be taken into account at the time of doing it, the main ones being:
DATE
The Code of Commerce establishes that the general assembly must meet at least once a year. The exact date of the same may be established within the bylaws that regulate the company, as long as it is within the first three months of the year. In the event that the meeting is not properly called or no date is set for it, the Code makes up for this defect by indicating that the meeting shall then be held on the first business day of April, at 10 a.m., at the offices of the main domicile where the administration of the corporation operates.
LOCATION
In theory, the place to hold the ordinary meeting is at the main domicile of the company. However, Article 19 of Law 222 of 1995 allows the meeting to be held in a non-presential manner when all the partners can deliberate and decide simultaneously or successively. This means that it is perfectly possible to hold such a meeting by teleconference or other means of electronic communication, provided that all members participate in the meeting.
CALL FOR PAPERS
The manner of convening the assembly meeting is normally fully regulated in the bylaws. Otherwise, the Commercial Code establishes that this must be done by publishing the notice in a newspaper of wide circulation in the domicile of the company.
AGENDA
Although the ordinary assembly meetings do not have a limit that prevents the members from dealing with topics other than those included in the agenda of the call, there are fundamental aspects that must be discussed at this meeting, again according to the Code of Commerce: to examine the situation of the company, appoint the administrators and other officers of their choice, determine the economic guidelines of the company, consider the accounts and balance sheets of the last fiscal year, resolve on the distribution of profits and agree on all measures to ensure compliance with the corporate purpose.
BALANCE SHEET APPROVAL
Although in the previous section it was pointed out that this was one of the fundamental points to be dealt with at an ordinary meeting, it is important to clarify that the call when dealing with this aspect must be made within the terms of article 424 of the Code of Commerce, i.e. at least 15 days in advance.
QUORUM
This figure, in turn, has two types: deliberative quorum and decisional quorum. The first consists of the number of assembly members required to discuss an issue, while the second is the percentage of members required for a decision on the issue under discussion to be approved. Each company contemplates in its bylaws the required percentage of votes in each case. It is therefore essential to have an exhaustive knowledge of these bylaws so that, subsequently, those members who are dissatisfied with the decisions of the meeting cannot allege that the meeting is invalid because it did not have the necessary quorum.
ACTA
It seems obvious that what was discussed at the ordinary meeting should be recorded in writing and that this should be done in accordance with the order of business; however, in our experience as business advisors, we have found a large number of companies that hold their meetings without leaving any evidence of this. The true guarantee that its decisions will be binding in the future for the other members of the assembly is precisely the properly prepared documentary evidence.
ENTRY IN THE MINUTES BOOK
Finally, once the ordinary assembly meeting is concluded and the minutes attesting to it are correctly prepared, this document must be recorded in the company’s minute book. This is because failure to maintain this book in due form can result in sanctions for the company of up to 200 legal monthly minimum wages, which as of today correspond to the sum of $165,623,200.
These are the essential elements to consider when conducting an ordinary assembly meeting. We hope that this allows commercial companies to carry out the process correctly. However, in recent times, the importance of having a legal advisor present during the assembly has become evident, precisely to guarantee that its proceedings are correct and valid. But that will be the subject of another article.
NÉSTOR ARTURO BEDOYA VÉLEZ
