Procedure for organizing a General Meeting of Shareholders under the Law on Enterprises 2020
The General Meeting of Shareholders is the highest decision-making body of a joint stock company. Therefore, organizing a meeting in strict compliance with the order and procedures prescribed by law is of particular importance to the legality of the resolutions passed. The article below outlines the basic steps in the procedure for organizing a General Meeting of Shareholders under the Law on Enterprises 2020.
Pursuant to Clauses 1 and 2 of Article 139 of the Law on Enterprises 2020, meetings of the General Meeting of Shareholders consist of two types, namely annual meetings and extraordinary meetings. Accordingly, the General Meeting of Shareholders must convene an annual meeting once every year, and such meeting must be held within 04 months from the end of the financial year. Where necessary, the Board of Directors may decide to extend the time for convening the annual meeting, but not beyond 06 months from the end of the financial year, unless otherwise provided in the company’s Charter.
In principle, the procedure for organizing a General Meeting of Shareholders is usually carried out through the following steps:
1. Step 1: Preparing the list of shareholders entitled to attend the meeting
The person who has authority to convene the General Meeting of Shareholders shall prepare the list of shareholders entitled to attend the meeting based on the company’s register of shareholders. Such list must be prepared no more than 10 days before the date on which the invitation to the meeting is sent, unless the company’s Charter provides for a shorter period.
2. Step 2: Preparing the meeting agenda and contents, and sending the notice of invitation
After preparing the list of shareholders entitled to attend the meeting, the convener shall prepare the meeting agenda, meeting documents, draft resolutions, and other necessary contents. The notice of invitation must be sent to all shareholders entitled to attend the meeting at least 21 days prior to the opening date of the meeting, unless the company’s Charter provides for a longer period. The invitation notice must be accompanied by the meeting agenda, documents to be used at the meeting, draft resolutions for each matter, and voting ballots.
3. Step 3: Conducting the General Meeting of Shareholders
- The first meeting can proceed when the attending shareholders represent more than 50% of the total voting shares, unless the company’s Charter provides for another specific ratio.
- If the first meeting does not satisfy the conditions for being conducted, the notice of invitation for the second meeting must be sent within 30 days from the intended date of the first meeting, unless otherwise provided in the company’s Charter. The second meeting may proceed when the attending shareholders represent at least 33% of the total voting shares.
- If the second meeting still does not satisfy the conditions for being conducted, the notice of invitation for the third meeting must be sent within 20 days from the intended date of the second meeting; in such case, the third meeting can proceed regardless of the total number of voting shares represented by the attending shareholders.
4. Step 4: Passing resolutions of the General Meeting of Shareholders
Depending on the nature of each matter, resolutions of the General Meeting of Shareholders shall be passed according to different voting thresholds. Accordingly, important matters such as changes to business lines; changes to the management structure; investment projects or asset transactions of significant value; and reorganization or dissolution of the company generally require approval by shareholders representing at least 65% of the total voting shares of all attending and voting shareholders, unless the company’s Charter provides for a higher threshold. For all other matters, resolutions are generally passed when more than 50% of the total voting shares of all attending and voting shareholders vote in favor.
It should be noted that, where the order and procedures for convening the meeting and passing resolutions of the General Meeting of Shareholders seriously violate the provisions of law or the company’s Charter, a shareholder or a group of shareholders has the right to request the Court or an Arbitral Tribunal to consider annulling such resolution pursuant to Article 151 of the Law on Enterprises 2020. However, the Law on Enterprises 2020 also recognizes an exception whereby, if a resolution is passed by 100% of the total voting shares, such resolution shall remain lawful and effective even if there are violations in the order and procedures for convening the meeting and passing the resolution.
The convening, organization, and passing of resolutions of the General Meeting of Shareholders are not merely internal procedures but are also directly connected to the legal validity of such resolutions. Therefore, enterprises should strictly comply with the provisions of the Law on Enterprises 2020 and the company’s Charter to minimize the risk of disputes and legal claims during their operation.
Submission date: 20/03/2026
Disclaimers:
This article is for general information purposes only and is not intended to provide any legal advice for any particular case. The legal provisions referenced in the content are in effect at the time of publication but may have expired at the time you read the content. We therefore advise that you always consult a professional consultant before applying any content.
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