As a resolution adopted in a general meeting is binding for all shareholders regardless of whether or not they have participated in that particular meeting, the legislator has made it mandatory that those shareholders holding a specific capital ratio shall be present and vote in favour of that resolution in a general meeting so that meetings may be held and resolutions may be adopted.
When determining quorum figures, the legislator has taken into account the agenda items. It has rather introduced simple quorum concept but also required aggravated meeting and resolution quorum for specific matters, depending on how critical or important they are.
Numbers below represent the meeting and resolution quorum as stipulated in the legislation so that a general meeting may be held and resolutions may be adopted there in incorporations.
(i) Simple Quorum
(ii) Statutorily Aggravated Quorum
While it is possible to aggravate such quorum described as above by means of certain provisions that shareholders may add into the articles of association, it is not possible to reduce an aggravated quorum to a lesser one.
At this point, we look up to shareholders’ agreements for investors who wish that such quorum that is more aggravated than the statutorily required one should be applicable in the company’s articles of association for specific matters. Shareholders may introduce this kind of provisions in their agreements so that they can be subsequently incorporated into the articles of association. Depending on the company’s business line and the goal of the investor in its investments etc., an investor may seek for a quorum that is more aggravated than the one sought in the legislation, and this investor is recommended to introduce this kind of provisions into such shareholders’ agreement he shall enter into.
On the other hand, an investor who will invest in an existing company by way of investment is advised to strictly check both the Company’s articles of association and the existing shareholders’ agreement to which he shall be a party because if there is an aggravated quorum that make it highly challenging to adopt resolutions in the company, and that may even lead to a deadlock, it is critical to know about them in advance before the investment and to go over the investment decision accordingly.
We would like to finally note that if a resolution is adopted without the necessary quorum that is in breach of the quorum provisions set out in the shareholders’ agreements and incorporated into the articles of association, this may give rise to the fact that these general meeting resolutions are null and void. Moreover, even if these provisions agreed in a shareholders’ agreement are not incorporated into the articles of association, if resolutions in breach of the agreement are adopted, demands and sanctions may be applied according to general provisions pursuant to the shareholder’s contractual right.
