ETHIOPIA Law and Practice Contributed by: Sisay Habte, Tibebe Zewdu, Michael Mengistu and Helina Bezabih, TBeST Law LLP
3.2 Decisions Made by Particular Bodies The various management bodies have different mandates. Please see 3.1 Bodies or Functions Involved in Governance and Management for details on the mandates of the shareholders’ meetings. Shareholders’ Meetings The general meeting of shareholders holds two types of meeting: ordinary and extraordinary shareholders’ meetings. Ordinary general meeting of shareholders A meeting will be called by the board of direc - tors, by the manager where there is no board or it fails to call the meeting, or in case of fail - ure by the preceding by the auditor, if any, or by members representing more than one-half of the capital of the company. A meeting is to be held once at least within four months from the end of the financial year. The four-month period may be extended for up to six months. An ordinary general meeting can expect to see the following on the agenda: • amend, approve or reject, after discussion, the balance sheet, the profit and loss account as well as reports of the board of directors, reports of the auditors and supervisory board, if any, and where necessary, pass resolutions relating to the allocation of and distribution of profits and on all questions arising out of the accounts for the past financial year; • appoint or remove directors, members of the supervisory board or auditors as appropriate and decide the amount of their remuneration; • approve the issue of debentures as well as the guarantees attached thereto;
• approve transfer of 51% or more of the assets of the company at once or within one year from the date of the first sale at different intervals; and • decide all matters on which a general meeting passes decisions other than those specifically reserved to an extraordinary general meeting. Extraordinary general meeting of shareholders This meeting has the authority to make major decisions such as amending the memorandum of association, increasing or reducing the capital of the company, appointing a liquidator, deciding on dissolution, conversion, division or merger of the company, and changing the nationality of the company. Board of Directors • Quorum – majority of directors must be pre - sent unless a greater vote is required by the memorandum of association. • Decision-making – majority of directors who are present personally, by proxy and by elec - tronic means. Unless provided otherwise, the chairperson shall have a casting vote in case of a tie. • Mandates – the directors have a duty to per - form the tasks imposed on them by law, the memorandum of association and resolutions of the general meeting of shareholders. In particular they shall: • manage the company’s finances with a view to ensuring that the company has adequate capital and liquidity to meet its liabilities in a timely manner; • ensure that the company’s governance arrangements are such as to ensure the proper monitoring of the company’s financial statements and positions;
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