Ordinary vs. extraordinary general assembly
Who decides what — and why it protects shareholders.
By Amr Adel
Who decides what — and why it protects shareholders.
Shareholders exercise their rights mainly through general assemblies. Knowing which assembly decides what protects both the shareholders and the board.
The ordinary general assembly
It usually meets once a year after the financial year closes. It approves the financial statements and the board’s report, appoints the auditor, decides on dividends and elects or discharges board members.
The extraordinary general assembly
It is called for decisions that change the company itself: amending the articles of association, increasing or reducing capital, mergers, conversion of legal form or early dissolution. These decisions normally need a higher quorum and majority.
Why the distinction matters
- A decision taken by the wrong assembly can be challenged and annulled
- Minority shareholders rely on the higher thresholds for protection
- Banks and regulators check that resolutions were passed correctly
The exact rules depend on the company law and the articles of each company; legal advice should confirm them before any assembly is called.
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