When does the time limit for filing a motion to declare a resolution of the General Meeting invalid begin to run?

Preclusive periods for filing a motion

In this regard, the law distinguishes between two key periods:

1. Three-month period: This period begins to run from the moment the entitled person learned or could have learned of the adopted resolution. If the period expires, the right to file a motion lapses.

2. One-year period: This period is absolute and runs from the moment the resolution is adopted. If the period expires, the right to file a motion lapses.

Subjective and objective determination of the start of the period

A significant interpretation provided by the Supreme Court is the combination of subjective and objective determination of the start of the three-month period. The subjective element relates to the moment when the entitled person actually learned of the adopted resolution. The objective element is based on the assumption that the person could have learned of the resolution if they had exercised ordinary diligence.

Non-attendance of a shareholder at a general meeting

An important aspect of the decision concerns shareholders who, of their own volition and for reasons on their own side, do not attend the general meeting, even though they were duly and timely invited. In the case at hand, the shareholder (the appellant) was duly and timely invited to the general meeting.

The Supreme Court emphasized that in this case, the shareholder had an objective opportunity to learn about the proposed resolutions from the invitation to the general meeting. The fact that the shareholder (the appellant) did not collect the invitation to the general meeting cannot change this. Such a fact can in no way be to the detriment of the company.

Under these circumstances, according to the Supreme Court, the three-month preclusive period fundamentally begins to run on the day the general meeting is held. Not later, when the shareholder actually informs themselves about the adopted resolutions.

Among other things, the Supreme Court aptly stated: "A shareholder who, without more, does not exercise their right to attend a session (meeting) of the general meeting cannot have (in relation to the right to seek a declaration of invalidity of a general meeting resolution) a better position than a shareholder who duly and honestly attends the session (meeting) of the general meeting."

This interpretation underscores the importance of loyalty and diligence on the part of shareholders in obtaining information about the company's affairs in a timely manner. At the same time, it ensures the stability and predictability of legal relations between shareholders and the company.

If the deadline for filing a motion for invalidity were extended due to a shareholder's inactivity (not collecting the invitation, willful non-attendance at the general meeting), it would, among other things, lead to the destabilization of the internal affairs of companies.

Preclusion of the right to file a motion

If a motion for the invalidity of a resolution is not filed within the prescribed period, the right of the shareholder or other entitled persons lapses. As stated, the validity of a resolution can no longer be reviewed if the three-month or one-year period has expired. This principle ensures legal certainty and protects the stability of relationships within the company. The legal order thus emphasizes that shareholders and other entitled persons should exercise their right to review resolutions in a timely manner.

Conclusion and status under current legislation

The Supreme Court's decision provides a clear and practical interpretation of the preclusive periods for filing a motion for the invalidity of a general meeting resolution. This interpretation strengthens legal certainty for both shareholders and the company and ensures the protection of the rights of all affected persons while respecting the stability of the company's internal affairs. The decision discourages shareholders from being negligent and reluctant to fulfill their duties.

For the sake of completeness, it should be added that under the current Czech legislation, the shareholder (appellant) would probably not have the right to claim the invalidity of the general meeting resolution for another reason, namely the failure to file a protest, as they were apparently able to attend the general meeting. However, this was not the subject of evidence, as the courts in this matter primarily addressed the expiration of the preclusive period and its impact on the appellant's claim.

Are you a shareholder of a limited liability company or a joint-stock company and would like to have the validity of a general meeting resolution reviewed? Do you need expert representation at a general meeting? Do not hesitate to contact us; we will be happy to provide you with professional and prompt legal services.