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1. What is a quorum at a general meeting?
Quorum is a term used in the context of general meetings of a company to refer to the minimum number of members (partners, shareholders, etc.) present or represented at the meeting so that it is valid and that the deliberations are considered legal and binding.
In other words, a quorum is the minimum participation threshold required for the decisions taken at the general meeting to be valid and to produce their legal effects. If a quorum is not reached, the meeting cannot validly deliberate, and it is often necessary to convene a new general meeting.
The quorum varies according to the type of meeting (ordinary or extraordinary) and the type of company (SARL, SAS, SA, etc.), and it can also be determined by the company's articles of association. In general, the quorum is expressed as a percentage of the shares or shares owned by the members present or represented.
It is important to note that quorum does not refer to the majority required for the adoption of resolutions. A quorum is only for the minimum number of participants required for the meeting to be valid., while the majority refers to the percentage of favorable votes required for the adoption of decisions.
Respect for the quorum is essential to ensure a certain democracy in decision-making within the company, avoiding that a small group of members make decisions that involve all partners or shareholders.
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2. How do you calculate the quorum for a general meeting?
The quorum rules for general meetings in SAS (Simplified Joint Stock Company) and SARL (Limited Liability Company) companies:
notes :
- The quorum for the ordinary general meeting (AGO) of a SAS is fixed in the company's articles of association. In the case of an SARL, there is no legal provision concerning the AGO quorum, the decision is taken according to the rules defined in the articles of association.
- The quorum for the extraordinary general meeting (AGE) of a SAS depends on the date of creation of the company: before or after August 4, 2005. For newly incorporated LLCs, no quorum rule is imposed by law.
Remember to check your company's articles of association, as they may contain specific quorum provisions for general meetings. Quorum rules may also be different in other forms of companies, so it is essential to refer to the applicable legal provisions.
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3. What are the penalties for non-compliance with quorum rules?
Failure to comply with the quorum rules at a general meeting can have serious consequences on the validity of the deliberations taken during the meeting. Indeed, a quorum is the minimum number of participants present or represented necessary for the decisions of the meeting to be considered valid and legally binding. If a quorum is not reached, the deliberations may be cancelled, and the decisions taken at this meeting will be considered null and void.
Non-compliance with the quorum may result from various reasons, such as an insufficient number of participants present or represented, convening errors, or even formalities. In some cases, this may be due to a lack of interest on the part of the partners or shareholders in the meeting or to insufficient mobilization.
To avoid any risk of cancelling deliberations, it is essential for the company to scrupulously ensure compliance with the convening and quorum rules. This includes proper planning, effective communication with participants, and the establishment of measures to encourage appropriate participation.
In the event of non-compliance with the quorum rules, it is generally necessary to convene a new general meeting to resume deliberations. This situation can cause delays in making important decisions for society and can impact its governance and development.
To ensure the validity of deliberations and avoid quorum-related issues, it is recommended that businesses strictly comply with legal and statutory provisions concerning convocation, quorum, and all other rules relating to the organization of general meetings. Particular attention should be paid to administrative details to ensure the smooth running and validity of meetings, and thus maintain the interest and commitment of participants in the decisions taken at the general meeting.
