General meeting in an ApS: notice, agenda and minutes

What is a general meeting?

A general meeting is the supreme decision-making body of a private limited company (ApS). It is here that the shareholders (owners) formally make the most important decisions about the company, including approval of the annual report, distribution of dividends, election of management and amendments to the articles of association.

General meetings in limited companies are governed by the Companies Act (selskabsloven), in particular the chapter on the general meeting.

Types of general meeting

Ordinary general meeting

The ordinary general meeting is held at least once a year within the deadline the articles prescribe, and in good enough time for the annual report to be filed on time. It typically deals with:

• The election of a chair for the meeting
• Management's report
• Approval of the annual report
• A decision on the use of profit or the covering of a loss (dividend)
• The election of management
• Any proposals from shareholders

Extraordinary general meeting

An extraordinary general meeting can be called when needed, for example on:

• Major strategic decisions
• A capital increase or reduction
• Amendments to the articles
• Merger, demerger or liquidation
• A change of director during the financial year

Calling a general meeting

Who can call it?

The general meeting is called by the central management body (the executive management or the board). Shareholders who own at least 5% of the share capital (or a lower threshold set in the articles) can demand that an extraordinary general meeting be called, under section 89 of the Companies Act. It must then be called within 2 weeks of the demand.

Notice requirements

Under section 94 of the Companies Act, notice of a general meeting must be given at the earliest 4 weeks and, unless the articles prescribe a longer period, at the latest 2 weeks before the meeting. The same period applies to both the ordinary and the extraordinary general meeting. The articles can therefore require a longer notice than 2 weeks, but not a shorter one. A shorter notice can only be used if all shareholders consent.

(For public limited companies with shares admitted to trading on a regulated market, longer periods apply.)

Formal requirements for the notice

The notice must:

• Be sent to all shareholders at their known address (electronic communication is sufficient if decided under the rules of the Companies Act)
• State the time and place of the meeting
• Contain an agenda stating the items to be dealt with
• For proposals to amend the articles, contain or make available the full proposal

The agenda: what must be included?

A typical agenda for the ordinary general meeting of an ApS:

1. The election of a chair for the meeting
2. Management's report on the company's activity in the past financial year
3. Approval of the annual report
4. A decision on the use of profit or the covering of a loss according to the approved annual report
5. The election of management
6. The election of an auditor (if the company is subject to an audit requirement or has chosen audit)
7. Any proposals from management or shareholders
8. Any other business

Voting rules in an ApS

Voting weight

In an ApS, shareholders as a rule have voting rights according to their shareholding, unless the articles provide otherwise. A shareholders' agreement can also govern how the owners vote among themselves.

Decision requirements

• A simple majority (more than half the votes cast) for most decisions, such as approving the annual report
• A qualified majority (at least two thirds of both the votes cast and the represented capital) for amendments to the articles, under section 106 of the Companies Act
• Stricter requirements or unanimity for certain far-reaching decisions

The minutes of the general meeting

The decisions at the general meeting must be entered in minutes, under section 101 of the Companies Act. The minutes should:

• State the date, time and place
• State the shareholders and representatives present
• Describe the decisions made
• State the voting results
• Be signed by the chair of the meeting

The minutes are the company's documentation of the decisions made and should be kept properly.

Amending the articles of association

Amending the articles requires:

• A proposal that appears in the notice
• Adoption by at least a two-thirds majority of both the votes cast and the represented capital (section 106)
• Registration with the Danish Business Authority via virk.dk, as a rule within 2 weeks

Typical amendments are a change of company name, purpose, capital or management structure.

Virtual general meeting

The Companies Act allows a partial or full electronic (virtual) general meeting under its rules. An electronic general meeting must give shareholders the opportunity to participate, speak and vote electronically.

An ApS with a single owner

In an ApS with only one shareholder, the general meeting can in practice be held by the owner making the decisions and entering them in the minutes. The formalities are the same, but the process is simpler.

Frequently asked questions

What happens if a general meeting is not held?

Failure to hold the ordinary general meeting and to file the annual report can ultimately lead the Danish Business Authority to send the company for compulsory dissolution. Management can, depending on the circumstances, incur liability.

Can the general meeting be held outside Denmark?

Yes, if the articles allow it or the shareholders agree. In practice, however, it is most often held in Denmark or electronically.

What is the difference between a board and executive management?

An ApS must have executive management with at least one director. A board is optional in an ApS. Any board handles the overall management and supervises the executive management, while the executive management handles the day-to-day management.