General meeting is a vital event for joint-stock companies where shareholders gather to discuss and decide on key matters influencing the companys future. Understanding the General meeting allows investors and shareholders to seize opportunities and accurately assess the companys performance.
What is the general meeting? Importance and role
General meeting is a meeting of all voting shareholders in a joint-stock company to discuss and make decisions on critical business operations and strategic development matters.
General meeting holds the highest authority within a joint-stock company, consisting of all voting shareholders. According to Article 138, Clause 1 of the 2020 Law on Enterprises (Vietnam), General Meeting has the authority to decide on the following matters:
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Approving the companys development orientation.
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Deciding on the types and total number of shares offered for sale.
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Approving the issuance of shares and adjustments to charter capital.
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Electing or dismissing members of the Board of Directors (BOD) and Supervisory Board.
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Approving annual financial statements and profit distribution.
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Deciding annual dividends for each share class.
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Approving mergers, consolidations, splits, separations, or dissolution of the company.
There are two main types of shareholder meetings: the Annual General Meeting (AGM) and the Extraordinary General Meeting (EGM).
What is the Annual general meeting (AGM)?
The AGM is a periodic yearly meeting where shareholders review business performance and governance issues. As stipulated in Article 139 of the Law on Enterprises 2020, the AGM must be held within four months after the end of the fiscal year. This period may be extended but not exceeding six months.
What is the Extraordinary general meeting (EGM)?
The EGM is convened outside the regular annual schedule to resolve urgent matters requiring shareholder approval, such as:
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The BOD deems it necessary for the company’s interests.
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The number of BOD or Supervisory Board members falls below the legal minimum.
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Shareholders or groups holding at least 10% of total voting shares demand a meeting.
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Other cases as prescribed by law or the company’s charter.
Procedures and key notes in organizing the general meeting
General Meeting usually follows these steps:
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Preparation: The BOD compiles a list of eligible shareholders, prepares meeting documents, and sends invitations.
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Convening: The BOD or Supervisory Board convenes the GMS according to legal and charter regulations.
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Meeting: The GMS is held when the required quorum is met. The meeting includes activity reports, discussions, and voting on resolutions.
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Passing Resolutions: Resolutions are passed by voting, meeting the required approval ratio per law and the company charter.
The BOD plays a critical role in preparing and organizing General Meeting, ensuring smooth execution. They also report on business performance, propose development strategies, and address shareholder concerns.
Emerging trends in general meeting
With digital transformation, many companies are adopting virtual General Meeting models, enhancing transparency and efficiency. Additionally, large corporations focus more on protecting minority shareholders rights and attracting long-term investors through transparent policies.
Key trends include:
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Applying blockchain technology in shareholder voting.
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Enhancing information transparency and ESG (Environmental, Social, Governance) reporting.
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Strengthening protection for minority shareholders.
General meeting and impact on stock prices
General meetings typically fall at the end of Q1 and early Q2, when companies hold their AGM to review performance and set plans for the next year. Stock markets often see significant fluctuations during this period based on GMS resolutions.
Do stock prices rise after the GMS? Not always. Stock price movements depend on the meetings content, outcomes, and market reactions:
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Positive results (high profits, growth plans, dividend increases) often lead to stock price gains.
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Negative results (poor business performance, share dilution) can cause stock prices to fall.
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Leadership changes or business strategy shifts may also influence investor sentiment.
HQA’s Valuation of enterprises – Optimal solution for general meetings
Accurate and transparent financial reports are crucial in every General Meeting, providing shareholders with the foundation for strategic decisions. Business valuation services not only offer precise asset assessments but also build investor confidence, supporting decisions on dividends, restructuring, and enhancing market position.
Why is valuation important in the General Meeting?
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Determine the company’s true value: Provide clarity on tangible and intangible assets and growth potential.
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Strategic decision-making foundation: Support mergers, share sales, capital raising, or financial restructuring.
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Ensure financial transparency: Meet legal requirements and build trust with shareholders and partners.
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Impact on stock price: Accurate valuation stabilizes the market and attracts investment capital.
With over 23 years of experience, Hoang Quan Appraisal (HQA) offers comprehensive valuation services tailored to business needs during shareholder meetings:
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Comprehensive valuation: In-depth analysis of assets, profits, cash flows, and financial metrics.
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Strategic consulting: Propose optimal solutions to enhance business performance.
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Legal compliance: Ensure reports meet legal standards and minimize risks.
HQA is committed to delivering accurate, transparent, and optimized valuation services, empowering businesses for every General Meeting of Shareholders. Contact us now for detailed consultation!
Hoang Quan Appraisal Co., Ltd.
Address: Hoang Quan Appraisal System
Phone: 0934.252.707
Email: contact@sunvalue.vn
Facebook: Hoang Quan Appraisal
Website: hqa.com.vn
Conclusion
General meeting is not only a forum for critical decision-making but also an opportunity for sustainable company growth. Each general meeting allows shareholders and companies to reflect on past achievements and chart a course for the future. This event significantly impacts internal decisions, stock values, and the company’s business strategies.
