Shareholders Meeting Agenda: Everything You Need to Know
A shareholders meeting agenda includes all the topics that will be discussed in an annual shareholders meeting. 3 min read updated on November 06, 2020
A shareholders meeting agenda includes all the topics that will be discussed in an annual shareholders meeting. Generally, a copy of this agenda will be sent to shareholders when they are notified that the meeting will take place.
Requirements for a Shareholders Meeting
Both public and private corporations are required to hold shareholders meetings on an annual basis. While a shareholders meeting is different from a director's meeting, they can happen at the same time, as long as the correct people are in attendance and the proper voting order is followed.
When incorporating a business, the date of your shareholders meeting will be included in your company bylaws. If your company's shareholders wish, this date can be changed by a vote. In Delaware, corporations are required to hold an initial shareholder meeting after incorporation. The purpose of this meeting is to approve the company bylaws and appoint a Board of Directors for the corporation.
Several circumstances may require you to hold a special shareholder meeting before your normal annual meeting, such as:
- Your company is involved in an acquisition or merger.
- You are planning to restructure your company.
- Your company is declaring bankruptcy.
In a limited liability company (LLC), the rules for holding annual meetings are much less strict, and shareholders are referred to as members. LLCs are not required to schedule an annual meeting. That being said, if the LLC has investors or shareholders, an annual meeting is recommended, as it will provide an opportunity to discuss the progress of the company. Also, the annual meeting's minutes can help shield the members from liability.
When Should Your Meeting Be Held?
In California, most corporations will hold their annual shareholders meeting soon after the Board of Directors meeting is concluded. Generally, the best time to hold your annual meeting is at the end of your corporation's fiscal year. Holding your meeting at this point will allow you to easily assess your corporation's performance for the previous year. If your corporation is in Delaware, holding your meeting at this point will make it easier for you to collect information about newly elected directors and officers, so you can meet your annual report filing requirements.
Because many shareholders meetings are held during normal business hours, shareholders who work full-time jobs may find it very difficult to attend the meeting.
Notifying Your Shareholders
Anyone who owns stock in your company is entitled to receive any important information about their investment. In most states, corporations are required to notify their shareholders when a meeting is to take place. This notification should be sent by mail at least 10 days before the meeting will be held. Usually, you should keep a copy of the notification sent to shareholders in your corporation's Minute Book.
The notice that you send to your shareholders should contain several important pieces of information:
- The time of the meeting.
- Where the meeting will be held.
- A copy of the shareholders meeting agenda.
You should also include several documents with the shareholders invitation:
- The minutes from the previous shareholders meeting.
- A list of the topics that will be discussed.
- A company progress report that includes financial statements.
Providing these documents to shareholders before the meeting will allow them to come prepared with questions. If a shareholder does not come to the meeting, whether because they are unable to attend or do not feel like their attendance is necessary, you can keep documentation of their failure to attend in your company's records.
When you receive notification that one of your shareholders will not attend the annual meeting, you should encourage them to cast their votes by proxy. Proxy votes can be sent either by mail or online. For a proxy vote to be valid, it usually needs to be in writing.
When shareholders want to influence the topics that will be discussed at the annual meeting, they need to write their suggestions and then send them to the Board of Directors. Every shareholder should understand that electing the Board of Directors is their right. In most cases, formal language is used in notifications of annual meetings sent to company shareholders. The reason for this is that these meetings are a requirement of the corporate form and are not meant to be a social gathering.
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