Here we tell you all about what a general meeting is, why they are held and how you as a shareholder can take part in a general meeting.
What is a general meeting?
A general meeting (bolagsstämma) is a formal meeting and the highest decision-making body in a limited company. At the general meeting, shareholders can make decisions on important matters concerning the overall governance of the company, for example approval of the annual report, dividends, election of the board and auditors, and amendments to the articles of association.
What types of general meeting are there?
There are two types of general meeting:
- Annual general meeting (AGM). which is held once a year and at which mandatory items such as the annual report, dividends, discharge from liability for the board, and election of the board and auditor are dealt with.
- Extraordinary general meeting. which can be held at any time during the year to deal with specific matters that cannot wait until the next annual general meeting. This can include decisions on major investments, raising capital, amendments to the articles of association or a change of management.
What can shareholders do at the general meeting?
Those who hold shares in the company may:
- Vote on important decisions. How many votes each shareholder has depends on their shareholding and any division into share classes. Normally one share carries one vote, but some companies may have shares with different voting rights.
- Ask questions and request information about the company's operations and finances. The board is obliged to answer questions as far as this can be done without harming the company.
- Propose matters to be raised at the general meeting in advance. Shareholders with a certain proportion of the shares (usually at least 10%) have the right to have their proposals considered, for example on letting a venture capitalist invest capital.
How can you take part in a general meeting?
Provided that you own shares in the company, you can take part in a general meeting by following the information in the notice, which states the date, time, place and agenda. For listed companies the notice is sent out at least one month before the meeting, while private limited companies often send it out two weeks in advance. Shareholders usually also need to register their intention to attend the meeting in order to be present and vote.
How does a general meeting work?
Below we describe the steps of a general meeting, from the moment the notice is sent out until the meeting closes.
- The notice is sent out. The board sends out a notice of the general meeting with all the necessary information about time, place and agenda. Shareholders normally need to register their attendance in order to vote at the meeting.
- Registration of attendees. Before the meeting begins, all attending shareholders are registered and their voting rights are confirmed against the share register and, where applicable, a set record date.
- The general meeting is opened. Normally the chair of the board opens the meeting, after which a chair of the meeting is appointed to lead it.
- Going through the agenda. The chair of the meeting goes through the agenda and takes up all items in the correct order. Shareholders can ask questions and give their views on each item.
- Votes and decisions. Votes are held on the items that require a decision. Some decisions require a simple majority, while the most important decisions require a qualified majority (a special majority of votes) to be approved.
- The meeting closes. When all items on the agenda have been dealt with, the general meeting closes. Minutes documenting all decisions are drawn up and later signed by the chair of the meeting and the persons appointed to verify the minutes.
Do unlisted companies hold general meetings?
Yes, unlisted companies are obliged to hold general meetings, just like listed companies on, for example, Nasdaq. Unlisted companies can also call an extraordinary general meeting when needed, in the same way as listed companies. The difference is that listed companies often have more formal requirements to follow regarding notices and disclosure.
Can a dividend be decided at an extraordinary general meeting?
Yes, it is possible to decide on a dividend at an extraordinary general meeting if there are distributable funds according to the balance sheet and if the dividend is considered prudent under the Swedish Companies Act (aktiebolagslagen). The decision must follow the statutory rules on dividends, particularly regarding the prudence assessment and distributable funds. It is important to document the decision carefully and follow the requirements of the Swedish Companies Act.
