This article answers the question “what is a general assembly?” You will also find an explanation of the difference between an ordinary and extraordinary general assembly.
What is a general assembly?
A general assembly is a meeting in which the company’s direction (e.g. ownership, board of directors and shareholders) can make decisions concerning the company. In the case of a capital company, the company law dictates that an ordinary general assembly be held once a year. However, it is possible to hold more than one general assembly a year but that would make it an extraordinary general assembly.
After holding a general assembly, a summary of decisions has to be drafted. You can find a template for such a summary in the picture below. The term can also be used in other contexts, for example in organizations, cooperatives or tenants’ associations when deciding regulations on leases, upkeep and such. A general assembly does not demand physical attendance but can be held electronically. Furthermore, it is possible to have someone represent you and act in your stead through power of attorney at the general assembly.
Ordinary general assembly
It is at a general assembly, that the financial statement for a company is approved. It has to be held within 5 months after the end of the fiscal year. Here, an annual report is approved and audits for future financial statements are determined. Furthermore, it can be decided, how to use a surplus or how to balance a deficit. This applies to a limited liability company, a joint stock company or an entrepreneurial company.
Sometimes, circumstances arise as a result of a company’s statutes, that have to be settled at ordinary general assemblies. The statutes will typically also indicate the voting rights of a general assembly.
Extraordinary general assembly
There are no conditions to what can be discussed at an extraordinary general assembly. They can also be held according to demand. For example, if the owners of a company (as they appear in the owners’ registry) have to make an important decision in between two ordinary general assemblies.
There are fewer formal requirements but you can use the occasion to choose a new director, establish a new draft rule, change the statutes or even change the company’s name. The Business Authority also has to be notified about changes.
It is important to remember, that you always have to keep a protocol of the decisions made in the general assembly. It is also referred to as a general assembly protocol.