The General Meeting of Shareholders is an important event in the operation of a company where shareholders can show their power and participate in decisions of the enterprise. However, holding the General Meeting of Shareholders in accordance with the law and effectively is not easy. In an increasingly complicated context and the strict regulations set by management agencies, the grasp of the procedures and the authorities of the General Meeting of Shareholders is extremely important.

Therefore, in this article, we will provide a detailed guide on how to hold the General Meeting of Shareholders in accordance with the law and help you ensure compliance with the law and facilitate this process.

1. Conditions for Conducting the General Meeting of Shareholders

The General Meeting of Shareholders is conducted when the number of shareholders attending the meeting represents more than 50% of the total number of votes; the specific ratio is prescribed by the company’s Charter.

For the first meeting, in case the first meeting is not eligible to proceed according to the information unless the company’s Charter has different regulations, a notice of invitation to the second meeting must be sent within 30 days from the intended date of the first meeting.

The second meeting, the second General Meeting of Shareholders is conducted when the number of shareholders attending the meeting represents 33% or more of the total number of votes; the specific ratio is prescribed by the company’s Charter. In case the second meeting is not eligible to proceed unless the company’s Charter has different regulations, a notice of invitation to the third meeting must be sent within 20 days from the intended date of the second meeting.

The third meeting, the third General Meeting of Shareholders is conducted regardless of the total number of votes of the attending shareholders.

2. Checking eligibility to attend the General Meeting of Shareholders and the right to vote

Shareholders, the authorized representatives of shareholders that are organizations can directly attend and authorize in writing one or several individuals, or organizations to attend the meeting or attend through one of the forms specified in the 3^rd clause of this Article.

Authorization for representative individuals and organizations to attend the General Meeting of Shareholders must be made in writing. The power of attorney must clearly state the name of the authorized individuals or organizations and the number of the authorized shares. The authorized individuals or organizations attending the General Meeting of Shareholders must present the power of attorney when registering before entering the meeting room.

Shareholders are considered to attend and vote at the General Meeting of Shareholders in the following cases:

• To directly attend and vote at the meeting;
• To authorize other individuals or organizations to attend and vote at the meeting;
• To attend and vote through online conferences, electronic voting, or other electronic forms;
• To send votes to the meeting by mail, letter, fax, or email;
• To send votes by other means as prescribed in the company’s Charter.

3. Procedures for Conducting the General Meeting of Shareholders

Unless the company’s Charter has different regulations, the procedure of meeting and voting at the General Meeting of Shareholders is conducted as follows:

• Before opening the meeting, registration of shareholders attending the General Meeting of Shareholders must be conducted;
• To elect the chairman, the secretary, and the vote-counting committee

The chairman of the Board of Directors is the chairman or authorizes other members of the Board of Directors to be chairman of the General Meeting of Shareholders convened by the Board of Directors; in case the chairman is absent or temporarily loses the ability to work, the remaining members of the Board of Directors appoint one of them to be the chairman of the meeting based on the principle of majority; in case it is impossible to appoint the chairman, the head of the Board of Supervisors manages so that the General Meeting of Shareholders appoints the chairman of the meeting and the person with highest number of votes will be the chairman of the meeting;

Unless the meeting is convened by the Board of Directors, the signatory of the convening of the General Meeting of Shareholders manages so that the General Meeting of Shareholders appoints the chairman of the meeting and the person with the highest number of votes will be the chairman of the meeting;

The chairman will appoint one or several people as secretary of the meeting;

The General Meeting of Shareholders appoints one or several people to the vote-counting committee at the request of the chairman of the meeting;

• The General Meeting of Shareholders approves the agenda and contents of the meeting in the opening session. The agenda must determine the time for each issue in the contents of the agenda.
• The General Meeting of Shareholders discusses and votes on each issue in the contents of the agenda. Voting is conducted by voting for, voting against, and abstention. Unless the company’s Charter has different regulations, the result of vote counting is announced by the chairman before the closing of the meeting.

4. Some notes when conducting the General Meeting of Shareholders

Shareholders or persons authorized to attend the meeting who arrive after the opening of the meeting can register and have the right to vote after having registered; in this case, the validity of the contents voted previously will not change.

The person convening or chairing the General Meeting of Shareholders has the following rights:

To request all attendees to be subject to inspection or other lawful and reasonable security measures;

To request the competent authorities to maintain the order of the meeting; expel those who do not comply with the chairman’s executive authority, intentionally disrupt order, prevent normal progress of the meeting, or do not comply with the requirements of security check from the General Meeting of Shareholders.

Postpone the General Meeting of Shareholders

The chairman of the meeting has the right to postpone the General Meeting of Shareholders although the meeting has had enough people registered to attend, the maximum time of postponement is 03 working days from the date the meeting is intended to open and the meeting can only be postponed or the meeting location can be changed in the following cases:

• The meeting place does not have enough convenient seats for all participants;
• The media at the meeting place does not ensure the shareholders attend the meeting to participate, discuss and vote;
• People are attending the meeting to obstruct, or disrupt order, and have the risk of preventing the meeting from being conducted fairly and lawfully.

With the above information, we hope that the enterprises can evaluate the overview of the process of holding the General Meeting of Shareholders and grasp the important points in compliance with the law, this will help the enterprises avoid the risks in the process of operation.

Time of writing: 11/07/2023

The article contains general information which is of reference value, in case you want to receive legal opinions on issues you need clarification on, please get in touch with our Lawyer at info@cdlaf.vn

You can refer for more information:

• Establishment of a branch of foreign Trader in Vietnam
• Foreign investors and labor outsourcing activities in Vietnam
• Manufacturing enterprises and location-related legal issues
• Key terms in the Franchise Agreement (Part 1)
• Key terms in the Franchise Agreement (Part 2)