A multi-person LLC must have at least two partners and a maximum number of partners. Partners have various rights, including the right to participate in assemblies and to be able to vote on the decisions that they take. Here is an overview of decisions that must be made at the meeting of the SARL and the voting rules that apply.
The different types of decisions taken by the partners of an LLC
In limited liability company, the decisions taken by the shareholders' meeting can be divided into three different categories:
- the regular decisions
- the remarkable decisions
- and unanimous decisions.
The decisions of the partners at ordinary meetings
The usual decisions in the limited liability partnership are similar to all the decisions taken by the partners, which are not exceptional (see the section below).
For example: the approval of the annual accounts, the distribution of results as well as the distribution of dividends and the appointment of the manager of the LLC as well as the decision on his compensation, the conditions of his dismissal, or the approval of regulated agreements...
The annual general meeting of shareholders of a limited liability company is a normal meeting, except when it is scheduled to take extraordinary decisions.
Voting rules for normal decisions
There is no quorum required to make these decisions, and the most common rules are:
- In the first meeting by one or more of the partners who represent more than 50% of the shares of the SARL ;
- At a second meeting by one or more of the partners who represent more than 50% of the shares of shareholders present or represented.
The statutes may provide rules for a higher majority percentage.
The decisions of the partners at an extraordinary meeting
Extraordinary decisions entail the need for a Extraordinary decisions entail a modification of the statutes of the SARL . It can be one of the following:
- Transfer of registered office,
- Modification of the corporate purpose,
- Changing the closing date
- Extension of duration,
- Change of company name,
- Capital increase,
- Capital reduction induced by losses or not,
- Dissolution of the LLC ou liquidation...
Please note these rules are not applicable to the EURL which is governed by the sole shareholder. Here is the procedure to follow in case of frequent changes: transfer of the registered office of an EURL, modification of the corporate name of an EURL, modification of the corporate purpose of an EURL ou increase in the capitalization of an EURL.
However, some decisions require a unanimous vote of the parties (see below) and others an even smaller majority. Thus, a vote of the partners who represent more than half of the shares is enough to make a decision:
- a capital increase by incorporation of reserves
- the transformation into a public limited company (SA) when the shareholders' equity of the SARL does not exceed the amount of 750 euros.
- or the dismissal of the manager who has been statutorily appointed.
Below, we will set out the rules of the game for making all other decisions that lead to a modification of the statutes of the association.
Voting rules for LLCs incorporated before August 4, 2005.
For SARLs that were incorporated before August 4, 2005, extraordinary decisions are taken by the partners who hold at least the three quarters of the shares. Need for a quorum.
The articles of association do not contain any other majority rules.
Voting rules for SARLs incorporated on or after August 4, 2005.
For SARLs incorporated since August 4, 2005, and for older SARLs that have chosen to follow the voting rules for SARLs incorporated on or after August 4, 2005, the following rules apply:
First of all, it is necessary to have a quorum to make decisions:
- At the first meeting : a quarter of the members must be present or represented so that the assembly can discuss;
- When second meeting : one fifth of the members must be present or represented for the meeting to deliberate.
When the quorum is reached, the decision is taken (both during the first consultation and during the second meeting) by a majority ofat least two-thirds of the shareholders present or represented.
The statutes may provide for a higher quorum as well as majority rules, but not up to unanimity.
The decision of the partners in a majority meeting
The following rules must be taken in unison by the limited liability partners:
- The change of the nationality of the company,
- La transformation into a simplified joint-stock company or in a general partnership, or in a simple limited partnership.
- The increase in the commitment of the associates,
- The absorption of the SARL by the SAS. SAS,
- For SARLs that were created before August 4, 2005, the adoption of the voting rules is necessary for SARLs created after August 4, 2005.
