Representation of a shareholder at the General Meeting of shareholders in Limited Liability Company (‘LLC”)
By its decision of 21.06.2024. The Supreme Court of Cassation clarified the form and content of a power of attorney authorizing a proxy to participate and vote in the General Meeting of Shareholders in an LLC, based on the established practice of the Supreme Court of Cassation on this issue.
The provision of Art. 137, para. 6 of the Commerce Act provides that the partners in an LLC may vote through a representative only with an explicit written power of attorney, except for partners – legal entities and legal representatives.
According to the supreme judges, the imperatively introduced legislative requirement not only for the presence of a written form of the power of attorney as a condition for validity, but also for determining the scope of the power of attorney, leads to the conclusion that in order for a shareholder to be able to vote at a general meeting of shareholders through a representative, it is necessary to specify not only to which meeting the power of attorney relates, but also the specific actions of the representative in the exercise of the right to participate and the right to vote of the shareholder.
The power of attorney must contain the issues on the agenda for the meeting, contained in the invitation to the shareholder. This requirement for the content of a power of attorney corresponds to the degree of protection that the provision of Art. 139 of the Commercial Act, and guarantees that the shareholder has information about the decisions that will be adopted at the meeting, has considered that he can participate through a proxy at the meeting, and has decided what representative power to grant to the proxy given the significance of these decisions.
However, the indication in the power of attorney of the method of voting on each issue (with yes or no), of the specific decisions or applications that should be supported by the proxy, is not introduced as a mandatory requirement in the law and cannot be considered as a requisite determining the validity of the power of attorney. The relationship between the authorizer and his proxy is one of trust and the degree of this trust depends on the amount of representative power that the grantor will establish with the power of attorney.