Shareholders are not asked to approve the accounts – they are merely provided with a copy – although they can ask questions on matters in the accounts. There may be additional matters that require a vote and the notice calling the meeting should tell you this.
Stockholder voting right allow shareholders of record in a company to vote on certain corporate actions, elect members to the board of directors, and approve issuing new securities or payment of dividends. Shareholders cast votes at a company’s annual meeting.
There must be at least 1 ordinary shareholder meeting per year for shareholders to approve or reject the balance sheet and financial statements of the corporation each fiscal year, among other matters. Some meetings may require the assistance of a Notary Public (eg, amendments to the bylaws).
The main documents of interest to shareholders will be the company’s annual report and accounts. Each shareholder has the right to receive these when they’re issued generally and on request.
Dividends must be approved by the shareholders through their voting rights. Although cash dividends are the most common, dividends can also be issued as shares of stock or other property.
Under this view, stockholder approval is required for as long as the sale involves at least 51% of the corporate assets, even if such disposition will not render the corporation unable to continue its business.
Stockholder Approval Required to: Amend the Certificate of Incorporation. Enter into fundamental corporate transactions (sale of company, merger, sale of substantially all assets of corporation, etc.) Elect Directors (though vacant seats from departed directors can often be filled by Board)
A director cannot enter into a contract to acquire anything of substance from the company, or to sell anything of substance to the company, unless shareholders have first approved the deal by passing an ordinary resolution, or the contract is conditional on getting that approval.
The need for shareholder approval of a merger is governed by state law. Typically, a merger must be approved by the holders of a majority of the outstanding shares of the target company.
Receive annual accounts – companies are required to distribute a copy of annual accounts and reports for each financial year to every shareholder (s. 423). Share certificates – members are entitled to be issued with a share certificate within two months of their shares being allotted (s. 769).
Who approves the financial statements of a company?
“The financial statement, including consolidated financial statement, if any, shall be approved by the Board of Directors before they are signed on behalf of the Board by the chairperson of the company where he is authorised by the Board or by two directors out of which one shall be managing director, if any, and the …
Do all directors need to approve accounts?
Section 414 of the Companies Act 2006 (CA 2006) requires that the accounts of a company be approved by the board of directors and signed by a director on behalf of the board.