Convening a general meeting of a limited liability company by email

The Business Corporations Act (Act No. 90/2012 Coll.) provides that the managing director of a limited liability company shall convene a general meeting at least once per financial year and must deliver the invitation in writing to all shareholders at least 15 days in advance. According to the legal regulation, the invitation is sent to the address of the shareholder indicated in the list of shareholders, unless the articles of association provide otherwise. This means that, by default, the law provides for delivery of invitations to the physical address of the partners (typically by registered letter). The invitation must also include the agenda of the meeting and the draft resolutions to be decided by the general meeting. Failure to comply with these legal requirements (for example, omission of a shareholder, late sending of the invitation or missing details) can have serious consequences - a defective or undelivered invitation is one of the typical grounds for a later challenge and invalidity of the general meeting resolution. Therefore, it is important to know not only the legal rules but also best practices on how to convene a general meeting correctly and minimize the risk of invalidating the adopted resolutions.

Author of the article: JUDr. Kateřina Müllerová, ARROWS (office@arws.cz, +420 245 007 740)

 

Convocation of the General Meeting by e-mail and modification in the articles of association

Is it possible to call a general meeting by e-mail? Yes, it is possible, but certain conditions must be met. The law requires a written form of invitation, but the form "in writing" does not exclude the use of electronic communication. The key point is that the law allows a company to regulate in its articles of association how to call a general meeting differently from the legal standard. In practice, it is now common and recommended that the memorandum of association permits general meetings to be convened electronically - typically by email. Many companies write directly into the articles of association that invitations may be sent electronically to the e-mail addresses of the shareholders (possibly by SMS).

If the memorandum of association allows for convocation by e-mail, the managing directors may send out invitations electronically and thus fulfil the legal obligation, provided that the other requirements (content of the invitation, deadline for delivery, etc.) are met. However, if your articles of association are silent on e-mail convocation, caution is advised. In this case, delivery to the address entered in the register of members (i.e. usually by post) is still formally required. Although the email itself is in writing, without the backing of the memorandum of association, someone could argue that the statutory procedure was not followed. Therefore, we recommend that the managing directors amend the articles of association - add a provision that expressly states that "the invitation to the general meeting may also be delivered to the shareholders electronically to the email address that the shareholder provides to the company for this purpose". Such a regulation will ensure clear rules for all shareholders. Ideally, each shareholder should confirm in writing his or her current e-mail address for invitations and undertake to report any changes. This will avoid disputes about where and how the invitation should have been delivered.

What the invitation must contain and how to write it

The content of the invitation to the general meeting of an LLC is determined by law and it is important not to forget anything. An invitation convened by e-mail must contain the same elements as an invitation sent by post. In particular, the text of the email (or attachment) should not be missing:

• Date, time and place of the general meeting - please provide the date, time and address (or a link to the online platform if the general meeting is held by video conference and the articles of association allow it). The place and time must not be chosen in such a way as to unduly restrict the ability of members to attend.
• Agenda - a list of items to be discussed and voted on. Make the agenda specific and clear enough so that the shareholders know what will be discussed.
• Proposals for resolutions on each agenda item (or the reasons for the proposals). The law expressly requires that the invitation include the draft resolutions to be voted on by the General Meeting. Therefore, for example, please provide the specific text of the proposed resolution (e.g. "The General Meeting approves the 2024 financial statements...") for each item. If it would be too long to list everything in an email, it is possible to indicate in the invitation that the documents and draft resolutions are an attachment (e.g. attached PDF documents) or that they are available for inspection at the company's registered office - but it is simpler and more usual to send them directly with the invitation.
• Further information as required. For example, in the case of joint stock companies, the law also requires the publication of the invitation on the company's website and the indication of the so-called record date, which does not apply to LLCs. In the case of an LLC, you can also include practical instructions in the invitation, e.g. whether the shareholders can vote in advance or remotely (if the articles of association allow it), a contact person to confirm participation, etc. It is also advisable to indicate who convenes the general meeting (the managing director) and at whose initiative, if it has been convened, for example, at the request of a qualified minority of the shareholders.

Formally, the invitation does not need to be signed (especially in the case of e-mail, an electronic signature is usually not used), but it is advisable to indicate at the end on behalf of the company which executive sent it. The language of the invitation should be clear and to the point, so that it can be understood by all shareholders - i.e. ordinary Czech rather than excessive "legalese".

Note: If the company has only one shareholder, there is no formal requirement for invitations - the sole shareholder decides for himself and the decision of the sole shareholder is then made in writing. In this case, an e-mail invitation is not an option. Our further interpretation assumes that there are multiple shareholders in play who need to be notified of the general meeting.

Deadline and delivery of the invitation by e-mail

Make sure that the legal deadline of 15 days before the general meeting is observed. This period is the minimum (the articles of association may specify a longer or shorter period if the articles of association permit) and is calculated so that the full 15 days must elapse between the date of delivery of the invitation and the date of the general meeting. Please note: the date of delivery and the date of the meeting are not included in the time limit - for example, if the general meeting is held on 30 June, the invitation must be delivered no later than 14 June. It is advisable to send invitations well in advance and preferably leave a few extra days in case of delays. You can also send your invitation on a Saturday, Sunday or public holiday, as the days are counted continuously.

The actual delivery of an e-mail invitation has its own pitfalls because, unlike registered mail or a data box, it is not automatically obvious when and whether the addressee received it. The case law shows that, for example, a letter is deemed to have been delivered when it comes into the addressee's possession - i.e. either it is physically handed over to the addressee, dropped in the mailbox, or the post office leaves a notice for the addressee to collect the parcel. In the case of electronic delivery, the situation is similar: the invitation is delivered as soon as it enters the shareholder's sphere of influence - in the case of a data mailbox, delivery occurs at the moment the shareholder logs into his or her data mailbox.

In the case of a regular e-mail, however, the moment of delivery cannot be so clearly determined (we do not have an automatic delivery confirmation system as in the case of a data box). The burden of proof that the invitation was delivered on time and correctly rests with the company (or the managing director as its body). It is therefore in the interest of the executive to have proof of sending and delivery of the e-mail. At a minimum, keep a copy of the message sent (ideally including the headers with the date and address) - this proves when and to what email you sent the invitation. However, this alone does not prove reading. It is therefore advisable to ask each associate for confirmation that they have received the invitation. Ideally, the addressee should reply with a simple email acknowledging receipt of the invitation and acknowledging the program. Save such a reply. You can also turn on the "delivery" or "acknowledgement of read" feature in the email settings, but not every recipient's email program will support or agree to this. An explicit reply is more reliable. If a companion does not respond to an email, extra caution is in order - you can contact them by phone to see if they received the invitation (and possibly forward it again) to be sure. If you are unsure about email delivery, you should also send the invitation by registered mail to his or her address. Some companies opt for "double delivery" - they send out the invitation by email to everyone and mail it at the same time to be sure.

Remember that any misdelivery is the company's responsibility. If the invitation did not reach a shareholder at all due to a typo in the email, a technical error and the shareholder did not read it, the shareholder cannot be blamed. Court decisions have stated that errors on the part of the post office (or generally the delivery) are the responsibility of the convening company. It can be assumed that a court would view similarly a situation where an invitation sent by email did not arrive due to technical difficulties - again, this would be the company's problem, not an excuse for the shareholder's non-attendance. Executives should therefore pay close attention to the delivery of invitations: double-checking the correct email addresses, sending in advance, maintaining evidence of sending and ideally obtaining confirmation from recipients.

Tip: If the associates have active mailboxes, consider delivering invitations there as well. Delivery to a data box has clear rules (an invitation is considered delivered when the recipient logs into the data box) and the data box generates an electronic

proof of delivery. For legal certainty, communication via data mailboxes is the most secure. However, not every partner - natural person actively uses a data box and therefore e-mail is more practical. However, it is always possible to combine both methods (e.g. send to a data box and to e-mail).

Risks of challenging the order and how to minimise them

As already mentioned, the most common reasons for the invalidity of a resolution of a general meeting are usually formal defects in the convening: failure to meet the deadline, non-delivery or defective content of the invitation, or convening by an unauthorized person. Executives want to act efficiently, but the process of convening a general meeting should not be underestimated, so that the time saved by "quick" organisation by e-mail is not later replaced by litigation. Here are the main risks and recommendations on how to avoid them:

• Omitted shareholder: if a shareholder does not receive an invitation at all or receives an invitation late (failure to comply with the 15-day deadline), he or she may challenge the validity of the adopted resolutions in court. The prevention is clear - consistently notify all shareholders at their current addresses (e-mail or postal, as agreed) and meet the deadlines. Keep an up-to-date list of shareholders and their contacts.
• Inadequacies in the content of the invitation: if the invitation lacks essential information (e.g. time, place, agenda or draft resolutions), this may also undermine the validity of the decision. The law has even tightened the requirements for the content of invitations precisely to ensure that the shareholders have all the essential information in advance. The solution is to use a checklist (list) when drafting the invitation - check that you have included all the essentials mentioned above.
• Email delivery disputes: email communication can sometimes fail (technical failure, spam filter). If the shareholder claims not to have received anything, it will be up to the company to prove otherwise. Therefore, as mentioned, collect evidence of delivery - confirmation from the shareholders, log of mail sent, or other communications that show the shareholder knew about the meeting. As a last resort, if the situation is disputed, it is better to reconvene the meeting properly than to litigate.
• Failure to specify formal requirements in the social contract: For example, if the memorandum of association requires a particular method of convocation or has other special provisions, you must comply with them. Executives should be familiar with the wording of their company's articles of association regarding convocation - sometimes there are details such as that the invitation should be hand-delivered or that convocation is also to be done by posting on the company's website. Non-compliance with your own articles of association is just as problematic as non-compliance with the law.

Summary of preventive steps:

1. Modify the articles of association - allow the convening of the general meeting electronically (e.g. by e-mail), provide for delivery addresses and, if necessary, for the fiction of delivery (e.g. that the e-mail is deemed to have been delivered on the date of sending unless it is detected opposite). This will give your action a solid legal basis.

2. Get consenting contacts from the shareholders - get each shareholder to confirm their email address in writing for the purposes of calling the AGM. If a companion provides one official address, you will reduce the risk of them objecting that you sent an invitation somewhere they didn't have access to.
3. Deliver in advance and have proof - send invitations well in advance (e.g. 3 weeks in advance to allow for a reserve) and keep proof of posting. It is ideal to get confirmation of email receipt (replies) from associates. If anyone does not acknowledge, consider also sending the invitation by post or otherwise contacting them.
4. Check the content of the invitation - before sending it, make sure that all the legal requirements (place, time, agenda, draft resolutions, etc.) are included in the email or attachments and that they are clearly worded. A missing or vague agenda may invalidate the resolution.
5. Avoid improvisation - don't call a general meeting hastily by word of mouth or informal text message without an official invitation. If the situation is urgent, it is better to use a decision outside the general meeting (per rollam), which is legally possible in the case of an LLC (the managing director sends a draft decision to all shareholders and they vote on it in writing) - but even there you must follow the procedure. Always convene a classic general meeting with a proper invitation, even if by e-mail.
6. Document the proceedings of the general meeting - take good minutes of the meeting and include everything that is important. If perhaps there was a minor formal deviation, the minutes can help certify that the shareholders were not shortchanged on anything material. For example, if someone came despite a later invitation and did not defend it, the minutes can confirm this.

Option to waive the right of invitation (consent of all partners)

For the sake of completeness, it is good to know that shareholders may waive their right to a timely and proper invitation. The law allows this in two ways: either by a written declaration in advance with a certified signature, or orally at the general meeting itself (this is then recorded in the minutes).

In practice, the latter is more often used - if all the shareholders meet, for example on short notice, they can unanimously agree on the spot to hold a general meeting even without an official invitation.

We recommend that such a statement be explicitly stated in the minutes and signed by all. This will "heal" any formal defects of the convocation. For example, the minutes may contain the statement "All shareholders present at the meeting have declared that they waive the right to a timely and proper convening of the meeting and agree that the meeting should be held today". Such an unequivocal confirmation (ideally signed by all

present) will ensure that none of them can later argue that the resolution is invalid due to defective convening.

Beware, however: only a partner who knows about it can waive the right to be invited - there is no excuse for not inviting someone who is not there at all. This mechanism is rather for the case when all shareholders are present (or agree in writing in advance) and want to hold the general meeting expeditiously. It is not a substitute for a proper convocation, but an insurance policy for consensual situations.

Conclusion

Managing directors of LLCs can effectively convene a general meeting by e-mail, but they must comply with the legal rules and recommended procedures in order for the decisions to stand. The key is to have the form of the convocation in order (ideally set out in the articles of association), to ensure that the invitation is complete and timely and to be able to prove delivery to all shareholders. Electronic communication can greatly simplify the convening of meetings and save time for all involved - but it must not be forgotten that the formalities surrounding the general meeting protect the rights of the shareholders. By following the principles described above, directors can use email to convene a general meeting without fear of their decisions being challenged later due to a formal error. Efficiency and legal certainty are not mutually exclusive if the procedure is correct and well thought out.