Proper Invitation to Shareholders’ Meeting is Essential – BGH II ZR 10/23
A recent decision by the Federal Court of Justice (BGH) underscores that a proper invitation to a shareholders’ meeting is not merely a formality but carries significant legal implications. On July 16, 2024, the BGH ruled that decisions made during a shareholders’ meeting can be invalid if the invitation was not issued correctly (Ref.: II ZR 100/23).
Shareholders’ meetings often involve crucial decisions. Matters such as resolutions, voting rights, and the proper convening and invitation to the meeting are therefore critical. This is especially true when the agenda includes resolutions to exclude a partner or dismiss a managing director, as noted by the commercial law firm MTR Legal Rechtsanwälte, which provides counsel on corporate law matters.
Shareholders’ Meeting Votes to Exclude Partner
The BGH’s decision of July 16, 2024, highlights the importance of a properly issued invitation to a shareholders’ meeting. In the case at hand, three attorneys had initially founded a partnership company (PartG mbB). Later, they admitted two additional attorneys as partners. The partnership agreement stipulated that the managing partner was responsible for convening the partnership meeting.
In July 2020, one of the partners issued a written invitation to an extraordinary shareholders’ meeting. The agenda included the exclusion of a founding partner, who was also the plaintiff in the case. Although the plaintiff received the invitation, he did not attend the meeting. In his absence, the shareholders unanimously voted to exclude him from the partnership.
The plaintiff contested the resolution, seeking a declaration that the decision to exclude him was void. He argued that the invitation should have been issued by the managing partner. Although the Regional Court and the Higher Regional Court (OLG) in Frankfurt dismissed his claim, his appeal to the BGH was successful: the court overturned the previous rulings.
BGH Overturns OLG Frankfurt Decision
The BGH ruled that the OLG Frankfurt had erred in its conclusion that the convening of the shareholders’ meeting contained no formal defects and that it was irrelevant that the invitation had not been issued by the managing partner. According to the OLG, this had no bearing on the decision made at the meeting.
The BGH disagreed. The invitation not being issued by the managing partner was a material issue. In a partnership company, an unauthorized individual issuing the invitation renders the invitation invalid, and any decisions made during such a meeting are void. The Karlsruhe judges emphasized this point.
They further explained that violations of the form, deadline, or content requirements for convening a shareholders’ meeting could render the decisions void if they prevent shareholders from adequately preparing for the meeting and its agenda. A violation of this “dispositional protection” constitutes a serious defect. However, such a defect only leads to the nullification of the resolution if it cannot be ruled out that the shareholders were influenced by the procedural error in their decision-making.
Invalid Invitation by Unauthorized Individual
This principle does not apply to the convening of a shareholders’ meeting by an unauthorized individual. According to established BGH case law, such an invitation is invalid, and the decisions made during the meeting are void, regardless of the legal form of the entity.
The BGH reasoned that an invitation by an unauthorized individual is not merely a formal error but equivalent to no invitation at all, which shareholders are not obliged to recognize. Compliance with the authority to issue invitations ensures that every shareholder’s right to participate in the meeting—and thus their ability to influence the company’s decision-making—is protected.
Severe Legal Implications
The BGH clarified that the legal implications of such procedural errors are as severe in partnerships as they are in corporations. The OLG Frankfurt must now revisit the case.
Although this case concerned a partnership company, the BGH’s decision is also relevant for other forms of partnerships and corporations.
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