To allow the approval of resolutions during theordinary general meeting (AGO) or extraordinary (AGE) of commercial companies, quorums and majorities must be respected. The rules applicable to a given company depend on the nature of the activity: SARL, SAS or SA.
In this document, we present the summary of the quorum and majority rules applicable to ordinary (AGO) and extraordinary (AGE) general meetings of SARLs, SAS and SA.
General Assembly: What is the definition of quorum?
Le quorum is a minimum attendance that must be achieved for a deliberation of the general meeting to be submitted to the votes of shareholders or partners.
The quorum can be set by the number of shares, or by the number of people attending the meeting.
Example The company is made up of 60 partners and the capital shares are divided into 5000 shares for the partners. For the meeting to be able to deliberate, a quorum is required, that is to say that a quarter of the partners is present or represented. It is therefore necessary that at least 15 partners of the company are present or represented for a deliberation to take place.
General Assembly: What is a majority?
La majority is the threshold that must be reached for a deliberation to be approved in assembly. If the majority is not reached, the resolution submitted to the vote is considered invalid.
The majority can be set according to the share capital, expressed in number of shares, according to the partners present or represented...
Example A company has four partners, each holding 25% of the shares, i.e. the share capital. These titles are all of the same type. The articles of association provide that the decisions of the general meeting must be adopted by a majority of the shares making up the share capital. A resolution is approved by the meeting when the shareholders who voted for it collectively own more than 50 percent of the shares of the company.
Majority and quorum rules in SARLs
The rules governing the general meeting (AGM)
In the case of deliberations that take place during the ordinary general meeting (AGO) of a SARL, the rules are generally as follows:
First call :
- quorum: no quorum,
- majority: the majority of the shares making up the share capital.
On the second call :
- quorum: no quorum,
- majority: majority of votes cast.
The rules applicable to extraordinary general meetings (AGE)
For discussions that take place at an Extraordinary General Meeting (AGE) of an SARL, the rules are based on the date the SARL was incorporated. LLC.
The LLC was incorporated on August 4, 2005
At the initial call :
- Quorum: a quarter of the shares making up the share capital,
- majority: two-thirds of the shares of the partners represented or present.
On second call :
- Quorum: one-fifth of the shares that make up the capital share,
- majority: two-thirds of the shares of the partners represented or present.
The statutes of the LLC may allow for a higher majority and quorum, but without the need for unanimity.
If you have a transfer of the registered office for an LLC the required majority is made up of half of the shares that make up the capital of the SARL.
LLCs incorporated before August 4, 2005.
The quorum is not provided for and the decision is taken by a majority of at least three quarters of the shares which constitute the capital. The statutes may not provide for a larger majority.
With the exception of the transfer of the registered office, or of a share capital increase by the incorporation of a reserve capital, the necessary majority is 50% of the shares making up the capital of the share.
Decisions to be made must be made in unison
Some decisions must be taken by majority vote. These include the following decisions
- the change of the nationality of the SARL,
- the increase in the commitment of the shareholders of the SARL (increase in the nominal value of the shares, change to SNC; change to variable capital).
Majority and quorum rules in SAS
The rules applicable to the ordinary general meeting (AGO)
The statutes of a simplified joint stock company (SAS) ) freely determine the conditions under which decisions are made at the ordinary general meeting.
It is therefore necessary to specify the rules of quorum and majority. The constitution of a quorum is not an obligation.
The rules applicable to extraordinary general meetings (AGE)
In the case of ordinary decisions, the statutes of a simplified joint-stock company may freely define the conditions in the rules of the extraordinary general meeting.
Decisions that must be made in unison
Some decisions taken by the shareholders of an SAS must be taken in unison. These decisions include those listed below
- the temporary inalienability of the shares,
- the increase in the commitment of the members of the SAS (increase in the nominal value of the shares, transformation into an SNC to become a SAS with variable capital or modification of an approval clause).
The Articles of Association of SAS allow for unanimous decision on the following matters which include change of form to a different form company, demotion of the chairman, change of nationality of the company, and dissolution of the SAS.
Majority and quorum guidelines in SA
Special rules, which we do not discuss here, exist for quorums and the majority in special meetings (preferred shares).
The rules applicable to ordinary general meetings (AGO)
For deliberations in a general meeting (GA) of a company, the rules are the same:
First call :
- Quorum: one-fifth of the shares with voting rights,
- majority: majority of the votes cast by the shareholders present or represented in the room.
On the second call :
- quorum: no quorum,
- majority: the majority of the votes cast by the shareholders present or represented.
It is possible to include in the statutes of the company more quorums than that mentioned above for the initial convocation of an AGM and for the convocations of an EGM.
Rules applicable to extraordinary general meetings (AGE)
In the event of deliberations held during an extraordinary general meeting (AGE) of a company, the rules are as follows:
On first call :
- Quorum: one quarter of the shares with voting rights,
- majority: two-thirds of the votes of the shareholders present or represented.
On second conv opportunity:
- The quorum is one-fifth of the shares with voting rights,
- majority: two thirds or more of the votes cast by the shareholders present or represented.
Decisions to be taken by majority
Some decisions must be taken unanimously. This is particularly the case for the following decisions
- the change of nationality of the SA when the host country has not concluded an agreement with France allowing the acquisition of nationality and the transfer of the registered office of the company on its territory while preserving its legal identity,
- the growing commitment of SA shareholders (increase in the nominal value of the shares, and transformation into an SNC).
