Shareholders and the General Meeting
General Meeting
In a German stock corporation various important decision-making powers are reserved for the General Meeting, to which the Board of Management and the Supervisory Board or the Supervisory Board alone submit proposals. These include:
Ordinary RightsAt the annual ordinary General Meeting of the company the following resolutions fall to the General Meeting:
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Appropriation of the distributable profits and - in so far as this has been resolved by the Board of Management and the Supervisory Board -
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The approval of the annual financial statements, the ratification of the actions of the members of the Board of Management and Supervisory Board and
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The appointment of the external auditor
At least once every five years, the shareholder representatives are elected and appointed to the Supervisory Board by the General Meeting. They can be dismissed at any time by a resolution of the shareholders without indication of the reasons therefore.
Participation in Corporate DecisionsThe influence of the General Meeting on the decisions of the Board of Management in the ordinary course of business is limited. Nevertheless, according to law, certain fundamental matters require the approval of the General Meeting. These include, among other things, amendments to the Memorandum and Articles of Incorporation, capital increases (including increases of the authorized and conditional capital, e.g. for the issuing of stock options to the Board of Management), capital reductions, the sale of the enterprise, the approval of stock buybacks (limited to 10% of the shares issued).
Furthermore, the approval of the General Meeting is required for certain matters, which involve an amendment to the Memorandum and Articles of Incorporation, the corporate purpose or the structure of the company or that of the Group. These also include inter-company agreements in the context of the law relating to groups of affiliated companies. The most important examples of this are control and profit transfer agreements.
Moreover, the approval of the General Meeting is required for integrations, mergers or any other form of transformation, including spin offs and transfers of the total or majority of the company assets.
