Every company or joint-stock company has a shareholders’ meeting as its highest social and administrative body, which performs certain functions. When the joint-stock company has a single shareholder, it will be up to this single shareholder to assume the functions of the Assembly.
What is the meeting of shareholders or partners?
The general meeting of shareholders is called the group of partners gathered in accordance with the provisions of the statute/bylaws, to make all those decisions and fulfill the functions that the law grants them.
The general meeting of shareholders may have ordinary meetings and extraordinary meetings in accordance with the provisions of the local Commercial Code.
Ordinary meetings will be held on the dates established in the company’s bylaws and at least once a year; when the statutes remain silent regarding ordinary meetings, the commercial code establishes that they must be held within three months following the expiration of each fiscal year.
Functions of the general meeting of shareholders.
The ordinary meetings of the general assembly will have the following purpose in accordance with the provisions of article 422 of the local Commercial Code:
The importance of the general meeting of shareholders is that, whether in the ordinary or extraordinary meetings, the partners in general are made aware of the situation in which the company finds itself globally and the essential decisions are made so that the company fulfills the objective for which it was created.
In the general meeting of shareholders, the transcendental decisions are made to achieve the success of the company and maintain everything in accordance with the provisions of the law.
Type of Meetings of Shareholders
The meetings of the general assembly of shareholders can be ordinary or extraordinary.
Ordinary meetings are those that are scheduled regularly, usually every year, to present general reports and deal with matters of general interest.
For their part, extraordinary meetings will take place when the situation so requires, that is, when unforeseen events or emergencies occur that warrant it.
Extraordinary meetings of the general assembly of shareholders may be called by the board of directors, the legal representative or the statutory auditor.
Place and date of the meetings of the shareholders’ meeting.
Local Commercial Code states that the assembly must meet at the main domicile of the company, on the date and time indicated in the call.
The meeting can be held in a different place if all actions are taken, and the meeting can be held without prior summons or notice.
Approval of Financial Statements
All companies have the obligation to summon their partners to meet in an assembly or meeting of partners. In this meeting the financial statements of the entity must be approved.
According to local Commercial Code, all companies have the obligation to summon their partners or shareholders at least once a year on the date determined in the statutes or, in silence of these, within the first three months of each year (that is, until March 31 of each year) to meet in shareholders’ meeting or board of partners.
At that meeting, the partners/shareholders have, among others, the obligation to approve the financial statements and the profit distribution project presented by the entity’s management.