ARMENIA Law and Practice Contributed by: Hayk Hovhannisyan and Suren Sloyan, HAP
Shareholder Rights Shareholders have the right to participate in general meetings (either in person or through proxies), where they can vote on significant deci - sions, such as the election of the BoD, approval of financial statements, amendments to the charter and decisions on dividends. In specific cases, shareholders may have the right to request additional information or chal - lenge decisions they believe are harmful to the company. Management and BoD Companies typically have a BoD that manages the company. The board is responsible for over - seeing the company’s operations, strategy and major decisions. Shareholders usually manage the company directly and have the power to elect members of the board and approve key decisions through shareholder meetings. Majority shareholders (those owning a significant portion of the shares) can have substantial influ - ence over the management. Minority shareholders have fewer direct powers but are protected by laws that prevent abuse by majority shareholders. They may be able to exercise influence, particularly if there are provi - sions in the company’s articles of association or shareholder agreement allowing minority share - holder rights. Directing Management While shareholders do not typically have day- to-day control, they can influence key strategic decisions, such as mergers, acquisitions or sig - nificant investments by voting in shareholder meetings.
Shareholders may also propose resolutions that management is required to present at general meetings and they can influence actions through these mechanisms. Voting on Specific Actions In specific cases, shareholders can direct man - agement to take or refrain from specific actions through their voting rights. For example, share - holders might approve or block the adoption of a business strategy or major contracts. Some decisions, such as changes to the char - ter, liquidation or changes in the legal structure, require shareholder approval. Shareholders have the power to influence man - agement through voting and shareholder meet - ings but their ability to directly manage day-to- day operations is limited for the most part. Their power is largely exercised through strategic decisions and oversight of the BoD. 5.3 Shareholder Meetings Shareholder meetings are mandatory for com - panies in Armenia. Both LLCs and JSCs have to convene AGMs to ensure proper governance and compliance with legal obligations. LLCs Frequency LLCs must hold an AGM at least once a year. The meeting should be organised within the timeframe specified in the company’s charter but no earlier than two months and no later than six months after the end of the financial year. Notice Shareholders must receive 20 days’ notice before an extraordinary general meeting (EGM) is convened unless the company’s charter spec -
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