Visit fondia.com
The content concerns Finnish legislation.
 

Decision-Making Power of the General Meeting

The general meeting is the highest decision-making organ in a limited liability company. The Limited Liability Companies Act provides for certain matters only to be resolved by the general meeting. This means that the matters in question can only be validly decided upon at the general meeting. Matters which can only be resolved by the general meeting are inter alia:

  • confirming the annual accounts;

  • electing the board of directors (it may, however, be provided in the articles of association that the members of the board of directors are appointed by the supervisory board);

  • electing the auditors (when choosing several auditors, it should be noticed that there might be provisions in the articles of association that the general meeting can choose only one of the auditors);

  • deciding on the remuneration of the member of the board of directors and possible members of the supervisory board (unless otherwise stipulated in the articles of association);

  • amending the articles of association;

  • deciding on the granting of discharge from liability of the members of the board of directors and the managing director;

  • making a donation for a public cause or another similar cause;

  • placing the company into liquidation;

  • amending the accounting period;

  • decreasing the share capital.

In certain matters falling under the decision-making power of the general meeting, the general meeting may authorize the board of directors to act on its behalf. Such matters are, inter alia:

  • distribution of profits or distribution of assets from the company’s non-restricted equity fund;

  • share issue;

  • issuing option rights and other special rights;

  • increase of the share capital (reserve increase, share capital investment);

  • acquisition of own shares.

The articles of association may also provide for the general meeting to resolve on matters belonging to the general competence of the board of directors or the managing director. This means a restriction of the corresponding decision-making power of another company organ - usually that of the board of directors. Matters which mandatory law qualifies as solely belonging to the competence of the board of directors cannot be assigned to the general meeting. Such a matter is, e.g. the appointment of the managing director.

The general meeting cannot make a decision contrary to the articles of association even with a majority sufficient to amend the particular provision. For instance, a resolution contrary to the company’s field of activity may not be made. Such decisions can be made only if all shareholders are unanimous thereupon. As a general rule, the general meeting cannot make a decision that is likely to produce any shareholder or other person an undue advantage at the company’s or another shareholder’s expense.