Shareholders' meeting (GmbH)
Shareholders' meeting (GmbH) - Gesellschafterversammlung
December 16, 2022
The highest governing body of the German Limited Liability Company (GmbH) is the entirety of the shareholders. The general meeting of shareholders adopts the articles of association. It makes its decisions through resolutions.
Unless the articles of association contain provisions to the contrary, only the shareholders of a GmbH are entitled to participate in the shareholders' meeting. In exceptional cases, it may be necessary to consult a lawyer, especially if decisions are pending which would have serious consequences for some shareholders.
Competence of the shareholder‘s meeting
Section 46 of the Limited Liability Companies Act (GmbHG) regulates the responsibilities of the general meeting of shareholders. According to this law, the shareholders decide, among other things, on the determination of the annual result and its appropriation, the demand of contributions, the repayment of additional contributions, the division or redemption of company shares or the appointment and dismissal of managing directors and their discharge.
The shareholders' meeting is also responsible for reviewing and monitoring the management of the company and appointing authorised signatories and authorised representatives for the GmbH.
The shareholders' meeting is convened in accordance with section 49 GmbHG. Afterwards the meeting is convened by the managing directors. Furthermore, section 49 GmbHG contains mandatory reasons for summoning a meeting, namely if the convening is necessary in the interest of the company or if the balance sheet shows that half of the share capital has been lost. In addition to the managing directors, individual shareholders may also demand that a shareholders' meeting be convened, but only if they together hold more than 10 percent of the company.
Passing of a Resolution
The resolution is adopted in accordance with section 47 GmbHG. According to this legal principle, resolutions are generally passed by a majority of the votes cast. Each euro of a share entitles the shareholder to one vote. The articles of association may contain other provisions and the voting weights may be structured differently. For example, by defining different classes of shares (e.g. Series A shares, Series B shares, etc.) and assigning them a higher voting weight. However, if the voting rights are more detailed, the voting rights structure leads to more detailed resolutions.
Simple and qualified majority
In principle, a simple majority is sufficient to pass resolutions on most of the items on the agenda, unless the articles of association provide otherwise. Abstentions are not counted. Certain resolutions require a qualified majority of 75% (three quarters) of the votes cast. The articles of association may combine these qualified resolutions with further requirements. For example, it can be ensured in this way that these resolutions may not be passed without the consent of investors, even if they have less than 25% of the votes.
Most articles of association also provide for a qualified majority for particularly important transactions. For example, real estate purchases or structural measures.