Comprehensive guidelines for organizing general meeting of shareholders

The General Meeting of Shareholders (GMS) is the highest authority within a joint-stock company, enabling shareholders to participate in critical decision-making processes. Organizing the GMS is not only a legal requirement but also essential for promoting transparency and effective governance within the company. This article will provide a step-by-step guide on how to conduct a General Meeting of Shareholders, covering aspects such as scheduling, necessary preparations, and the overall organization of the meeting.

1. When should the General Meeting of Shareholders be held?

a. Annual General Meeting of Shareholders

A joint-stock company is required to hold its Annual General Meeting of Shareholders within four months after the end of the fiscal year, ensuring that it takes place at least once a year. Should there be valid reasons, the Board of Directors (BOD) may extend this timeframe, but it cannot exceed six months after the fiscal year ends.

The agenda for the Annual General Meeting of Shareholders typically includes: 

Discussion and approval of the business plan for the upcoming year;

Review of the previous year’s financial statements;

Reports on the activities of the Board of Directors and the Board of Controllers (BOC), along with matters related to the company’s operations;

Consideration of other issues within the authority of the General Meeting of Shareholders, such as the dividend distribution to shareholders, self-evaluation of the Board of Controllers’ performance, and other significant matters.

b. Extraordinary General Meeting of Shareholders

An Extraordinary General Meeting of Shareholders is held in response to specific needs, such as when the Board of Directors determines that a meeting is essential for the company’s interests, or when the number of members on the Board of Directors or Board of Controllers falls below the legally required minimum.

2. Authority to call the General Meeting of Shareholders

a. Board of Directors

The Board of Directors has the authority to convene both the annual and extraordinary General Meetings of Shareholders. For the annual meeting, it is the responsibility of the Board to ensure that it occurs within the designated timeframe. In the case of an extraordinary meeting, the Board must convene it within 30 days following the emergence of the reason for the meeting.

b. Board of Controllers

Should the Board of Directors fails to call an extraordinary General Meeting of Shareholders on time, the Board of Controllers is authorized to convene such a meeting within 30 days after the deadline set for the Board of Directors.

c. Shareholders

Shareholders or groups of shareholders holding at least 5% of the total ordinary shares are entitled to request the convening of a General Meeting of Shareholders if the Board of Directors or the Board of Controllers fails to fulfill this obligation. While the timing for the shareholders’ request is not explicitly defined, they must adhere to all procedural requirements and submit the necessary documentation as outlined in the company’s Charter. If the Charter does not specify, shareholders or groups of shareholders may still convene a meeting with reasonable notice, typically 30 days or more. However, the ability of this group to call a meeting is generally restricted.

If neither the Board of Directors nor the Board of Controllers convenes the General Meeting of Shareholders when required, they are liable to compensate the company for any resulting damages.

3. Responsibilities for Organizing General Meeting of Shareholders

The organizer of General Meeting of Shareholders is responsible for several critical tasks to ensure compliance with relevant regulations during the meeting. These responsibilities include:

• Compiling a list of eligible shareholders;
• Providing information and addressing any complaints regarding the shareholder list;

• Establishing the agenda and content for the meeting;

• Preparing all necessary documentation for the meeting;

• Drafting the resolutions for the General Meeting of Shareholders based on the anticipated agenda, including a list and details of candidates for the Board of Directors and Board of Controllers elections;

• Setting the date and location for the meeting;

• Sending out invitations to all shareholders entitled to attend;
• Carrying out additional tasks related to the meeting.

4. Guidelines for organizing the General Meeting of Shareholders

a. Before the General Meeting of Shareholders

Step 1: Decide to hold the meeting.

The entity responsible for convening the meeting (Board of Directors, Board of Controllers, or shareholders) must issue formal notice regarding the meeting’s organization. This notice should explicitly outline the reasons for convening the meeting, the deadline for finalizing the list of attending shareholders, the date and location of the meeting, the agenda, and any other necessary preparations. The process for summoning the Board of Controllers and shareholders varies slightly:

• The Board of Controllers: The Board of Controllers is authorized to call a General Meeting of Shareholders if the Board of Directors declines to do so. The convening notice must indicate that the Board of Directors has refused and include the written request sent to them by the Board of Controllers.

• Shareholders: Shareholders or groups of shareholders may call a meeting if the Board of Directors and the Board of Controllers fail to act as requested. The invitation to the meeting must detail the reasons for convening, the time and location, the list of participating shareholders, and a written request directed to the Board of Directors.

Step 2: Prepare a list of shareholders eligible to attend the meeting.

The list of shareholders entitled to participate must be finalized at least 10 days before sending out the meeting invitation. For public companies, this list should be generated through the Viet Nam Securities Depository and Clearing Corporation (VSDC) to ensure both accuracy and transparency.

Step 3: Organize the agenda, materials, and documentation for the General Meeting of Shareholders.

The organizer is responsible for developing the agenda and content of the meeting, which should align with the purpose of convening. The agenda must clearly outline the time allocated for each topic to be addressed. In addition to the necessary explanatory documents, reports, and presentations relevant to the meeting’s content, it is also essential to prepare voting papers and election ballots if required.

Step 4: Distribute the meeting invitation notice.

Following the list created in Step 2, the invitation notice must be sent out at least 21 days prior to the meeting date, unless the Charter stipulates a longer notification period.

b. During the General Meeting of Shareholders

Step 1: Register shareholders for attendance.

Registration of shareholders must occur prior to the commencement of the meeting and continue until all shareholders are accounted for.

Step 2: Verify the conditions for convening the meeting and its commencement

The individual responsible for convening the meeting should officially declare its opening after confirming the necessary conditions for proceeding (as dictated by the charter in cases requiring a higher threshold):

• For the 1st General Meeting of Shareholders: the number of shareholders present must exceed 50% of the total voting rights;

• For the 2nd General Meeting of Shareholders: the number of shareholders present must exceed 33% of the total voting rights;

• For the 3rd General Meeting of Shareholders: there are no restrictions based on the total number of votes.

Step 3: Elect a chairperson for the meeting, designate a secretary, and form a vote-counting committee

Step 4: Confirm the agenda and topics to be discussed during the meeting

Step 5: Engage in discussions and conduct votes on each agenda item

Step 6: Tally the votes

Step 7: Announce the results of the vote counting

Step 8: Ratify the Minutes of the General Meeting of Shareholders

Step 9: Endorse the Resolution of the General Meeting of Shareholders

Step 10: Conclude the meeting

c. Post-General Meeting of Shareholders

Following the meeting, the resolutions adopted must be documented in the meeting minutes and made accessible to shareholders. For public companies, the resolutions from the General Meeting of Shareholders must be disclosed publicly in compliance with legal requirements.

5. Procedures for Annulling Decisions of the General Meeting of Shareholders

The resolutions and decisions made during the General Meeting of Shareholders take effect either on the date they are adopted or on a specified effective date outlined in those resolutions or decisions.

Shareholders, members of the Board of Directors, Directors or General Directors, and the Board of Controllers have the right to petition the Court or Arbitration for the annulment of a decision made by the General Meeting of Shareholders within ninety days of receiving the minutes of the meeting or the results of the vote counting. This right can be exercised in the following circumstances:

• The procedures for convening the General Meeting of Shareholders do not comply with legal requirements or the company’s charter;

• The procedures for decision-making and the content of those decisions violate legal standards or the company’s charter.

In such cases, the contested resolution remains in effect until the Court or Arbitrator issues a different ruling.

Therefore, organizing a General Meeting of Shareholders is a complex process that requires thorough preparation and strict adherence to legal requirements. It is crucial to comprehend the processes and authorities involved in convening and managing these meetings to promote transparency in the governance of the joint-stock company. The information provided above outlines the organization of the GMS within a joint-stock company. For any inquiries regarding the content of this article, please reach out to PLF for further guidance and assistance.

Conclusion

At PLF Law Firm, we understand that organizing a GMS is more than a procedural requirement—it is a cornerstone of corporate governance that reflects a company’s transparency, accountability, and commitment to its shareholders. Over the years, we’ve walked alongside countless businesses—large and small—as they navigated the intricacies of shareholder meetings. Each case tells a unique story of challenges overcome, goals clarified, and decisions made with far-reaching impact.

Whether you’re preparing for your first GMS or refining long-standing governance practices, PLF stands ready to assist. Our team of legal professionals offers tailored guidance to ensure your meetings are conducted efficiently, lawfully, and with strategic foresight. Let us help you turn legal compliance into a foundation for sustainable growth and trust.

For personalized support, please contact PLF. We’re here to help you write your next chapter—confidently and lawfully.

Time of writing: 24 February 2025  

PLF Law Firm