Electronic shareholders’ meeting in a limited liability company – how to organize it?

Shareholder meetings in limited liability companies using electronic means of communication are now a viable tool for streamlining resolution adoption, especially in companies with dispersed ownership. How can they be conducted legally? What are the best practices, and where do entrepreneurs most often make mistakes? Below is a practical guide for management boards and shareholders. 

What is a shareholders’ meeting using electronic means of communication? 

This is a shareholders’ meeting that must be convened at a location designated for shareholders’ meetings in accordance with the company’s articles of association or the Commercial Companies Code, but which can also be attended remotely. The legal basis is Article 234¹ of the Commercial Companies Code. This provision allows shareholders and other persons to participate in the shareholders’ meeting using electronic means of communication. 

What does this mean in practice? 

A shareholders’ meeting using electronic means of communication allows for:

Importantly, this form of participation in the meeting is permissible in principle. This means that shareholders may participate in the meeting remotely unless the company agreement expressly excludes this possibility. 

Practical note: this is not a fully virtual gathering. 

The regulations do not allow for a completely “unaddressed” meeting. At a minimum, the chairman and the minute taker must be present at the designated meeting location (usually the company’s registered office). 

This means that, despite shareholders participating remotely, a physical meeting location must still be available. This is one of the most frequently overlooked elements when planning an electronic shareholders’ meeting. 

How to organize an electronic shareholders’ meeting – step by step 

The first step is to analyse whether the articles of association agreement excludes remote participation. If it contains any restrictions, it may be necessary to amend it. 

Every limited liability company must have regulations specifying the rules for participation in the shareholders’ meeting using electronic means of communication: 

• if the company has a supervisory board, it develops the regulations; 

• in other cases, the partners adopt the regulations. 

The regulations may be adopted by a resolution of shareholders without a meeting, provided that shareholders representing an absolute majority of votes agree in writing to the content of the regulations. The regulations may not introduce excessive requirements. The legislature only permits restrictions that are necessary to identify shareholders and ensure communication security. 

In practice, this means, among other things: 

• login procedures, 

• identity verification, 

• transmission security, 

• archiving the proceedings. 

The decision to allow participation using electronic means of communication is made by the body or entity convening the meeting (usually the management board). 

Voting – how should it be conducted? 

Remote participation also includes the exercise of voting rights: 

• during the meeting, 

• and even before it begins. 

A shareholder may act in person or through a proxy, also online. 

It is important to distinguish this from adopting resolutions outside a meeting (Article 227 § 2 of the Commercial Companies Code). This separate procedure allows for a by-circulation vote without formally convening a meeting. In many cases, this solution is simpler, though not always possible. 

Voting on personnel matters must be secret. In practice, secret voting can be organized during a teleconference by using software that verifies the identity of participants and allows anonymous, encrypted voting, preventing the votes from being linked to specific shareholders. Also read: Liability of Limited Liability Company Shareholders 

Electronic shareholders’ meetings in a limited liability company – the most common mistakes in practice 

Project experience shows that problems occur in areas such as: 

1. lack of regulations or their defective adoption, 

2. failure to take into account the requirement of physical presence at the venue of the meeting, 

3. insufficient technical security measures (lack of real identification of the shareholder), 

4. no attendance list indicating who voted using electronic means of communication, 

5. incorrect signing of the minutes and attendance lists – in the case of a remote meeting, the minutes should be signed by the chairman and the secretary. However, regarding the attendance list, holding a shareholders’ meeting pursuant to Article 234[1] of the Commercial Companies Code excludes the obligation for the meeting participants to sign them. In such a case, the attendance list is signed only by the chairman and the secretary, 

6. lack of tools ensuring fully anonymous voting. 

Why is it worth implementing shareholders’ meetings using electronic means of communication?

The benefits are tangible: 

• faster adoption of resolutions, 

• lower organizational costs, 

• greater attendance of shareholders, 

• more efficient management of capital groups. 

At the same time, proper implementation requires consideration of legal and technical issues. Well-prepared regulations and procedures help prevent future challenges to resolutions.

Summary 

An electronic shareholders’ meeting in a limited liability company is an effective and secure solution, provided it is implemented correctly. Key elements include the absence of exclusions in the company articles of association, the adoption of regulations, and ensuring a physical meeting location with the presence of at least one person performing a formal function. 

In practice, it is the procedural details that determine the validity of resolutions, and these, as experience shows, are often more important than the content of the decision itself. 

How can we help? 

At TGC Corporate Lawyers, we support companies in the comprehensive preparation and conduct of shareholder meetings, both in person and via electronic means. We assist with, among other things, preparing documentation, amending the company’s articles of association, developing remote participation procedures, and ensuring compliance with the law. This ensures that the meeting can be held efficiently, safely, and in full compliance with the Commercial Companies Code. 

If you are planning a shareholders’ meeting, we would be happy to help you prepare and conduct it. Find out how we can help: Contact us 

FAQ – frequently asked questions