General Corporate Law

Even though it may seem logical, corporations need a quorum of attendance or presence, since in this way it is possible to take points of agreement; since it could be the case that there is a quorum of attendance or presence, but at the time of resolving the points of the Assembly, this is not possible due to the lack of a quorum for voting or deliberation.

b) Voting or deliberation quorum. Its resolutions shall be valid when adopted by a majority of the votes present, in case the minimum referred to (50%) is present, the vote would be at least 26%.

For example, if there are two partners and each one has 50% of the capital, the bylaws must consider that in order to hold the meeting, both in the first and second meeting, 51% of the capital stock must be present; this measure requires that in all cases both partners must be present. This recommendation represents a “lock” that provides legal and financial security to the investor.

What is the quorum for a general meeting?

– When there are nominative and bearer shares, the quorum is determined solely by the capital represented by the shares, without having to compute, in addition, the number of persons attending among the holders of the nominative shares.

What is a quorum of a company?

Attendance quorum means the minimum number of shares with voting rights that must be represented at the Meeting for resolutions to be valid; and voting quorum means the minimum number of votes required for a resolution to be validly adopted by the Meeting.

What is the quorum required for the validity of the resolutions adopted in second summons?

At second call, the attendance of at least three-fifths of the subscribed voting shares is sufficient. For the resolution to be validly adopted, a number of votes per share representing at least an absolute majority of the subscribed shares with voting rights is required.

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Types of quorum

General Meeting: attendance quorum: There is no irreducible contradiction between an article of the Bylaws which, for voting, requires a higher quorum than the one established for the call of the Meeting, since in fact, when the voting quorum is established, the attendance quorum is also established.

General Meeting: attendance quorum – In the case of a second call, it is not possible to establish the same quorum as for the first call, since it is evident from Article 51 that, in the spirit of the Law, the right of the shareholder and the interest of the Company in the constitution of the General Meeting are superior to the interest that the latter may have in the resolutions being adopted by a specific majority.

General Meeting: quorum of attendance. Although it may seem that the presence of at least two partners is necessary according to a grammatical interpretation of the Law, which is expressed in the plural -concurrents, partners-, as well as by the concept of the Meeting, which involves an idea superior to unity, and because with only one attendee there can be no deliberation, the opposite solution must be admitted, fundamentally because otherwise, in the case of joint ventures, it would be sufficient for the private party not to attend the Meeting convened to prevent the adoption of resolutions, without prejudice to the fact that if a quorum higher than that required by the Corporations Law is required, this provision must be complied with.

What is the General Shareholders’ Meeting of a corporation?

The General Shareholders’ Meeting, also known as the General Assembly of Shareholders or simply the Shareholders’ Meeting, is an administrative and supervisory body within the corporation, where key decisions on the operation of the company are made.

What is required for a general meeting to take place?

Article 164: “1. The Ordinary General Meeting, previously called for such purpose, shall necessarily meet within the first six months of each fiscal year, in order to, if appropriate, approve the corporate management, the accounts of the previous fiscal year and decide on the application of the result.

What quorum is required for the constitution of a general meeting on first call to adopt a resolution to amend the bylaws of a corporation?

In Corporations, the minimum quorum required at first call for the General Meeting of shareholders (present or represented) is 25%. The bylaws may raise this percentage.

What is a quorum in a society?

To which majority do we refer? Obviously, it is the majority determined by the bylaws (relative, absolute, reinforced); but if nothing specific has been expressed in the bylaws, a distinction must be made:

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* Simple majority, – what the original wording of art. 201 LSC cited as ordinary majority -; this is a majority of votes in favor over votes against, i.e., more shares vote in favor of the corresponding proposal than those voting against; then null or blank votes are not taken into account and naturally neither are those who attending do not vote.

* Absolute majority: more than 50% of the capital present and represented vote in favor. It should not be understood, as it is understood in the parliamentary sphere, for example, that the absolute majority refers to more than 50% of the body, in this case of the total share capital. The legislator is talking about present and represented capital.

And this is now important: Law 31/2014, of December 3, amending the Capital Companies Act for the improvement of corporate governance (came into force on December 24, 2014) has redrafted art. 201 LSC saying: 1. In public limited companies, corporate resolutions shall be adopted by simple majority of the votes of the shareholders present or represented at the meeting, with a resolution being understood to be adopted when it obtains more votes in favor than against of the capital present or represented. For the adoption of the resolutions referred to in Article 194, if the capital present or represented exceeds fifty percent, it shall be sufficient for the resolution to be adopted by absolute majority. However, the favorable vote of two thirds of the capital present or represented at the meeting shall be required when, on second call, shareholders representing twenty-five percent or more of the subscribed capital with voting rights are present without reaching fifty percent. Thus, the situation is as follows:

What types of quorum are there?

There are two types of Quorum: Deliberative and Decisional. (Art. 116 law 5ª of 1992) Decisions may be adopted with the attendance of at least two thirds of the members of the respective Corporation or Permanent Commission.

What majority is required by the LGS to amend the bylaws?

Article 167 of the LGS provides that each director has one vote, and that resolutions are adopted by an absolute majority of votes of the directors in attendance, unless the bylaws provide for a higher majority.

How is the quorum of the SA determined?

The quorum is established in different ways depending on the type of company, for example, in the case of companies with quotas or shares of interest, if the list of partners appears in the minutes, these will be compared with the persons who appear registered as partners in the Mercantile Registry, as of the date of the meeting (Art.

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Adoption of resolutions at the general meeting

a) Ordinary resolutions shall be adopted by simple majority, i.e. more votes in favor than against of validly cast votes, provided that they represent at least more than half of the shares into which the capital stock is divided, without counting abstentions or blank votes. Ordinary resolutions are understood to be those for which the Law or these bylaws do not expressly reserve a special reinforced majority”.

(…) c) Any kind of omission, refusal or failure to comply with the obligation to transfer its shares due to the exercise of a right of acquisition by another shareholder or shareholders under the terms set forth in Section IV of Article 10 of these bylaws.

“1.  When a partner, by himself, or jointly and concertedly with other partners with whom they have a relationship or kinship of up to the second degree between all of them, reaches a participation in the capital of the company equal to or greater than 50%, he shall have a right of acquisition over all the remaining shares of the company, being entitled to require the remaining partners to transfer to him/her, pro rata to their respective shareholdings, the shares owned by them, who in turn are subject to the obligation to transfer to the shareholder under the terms set forth in this Section IV.

By Rachel Robison

Rachel Robison is a blogger who collects information on court filings and notices.