Decision-making in a business with limited liability (SARL)

Verified 13 January 2023 - Directorate for Legal and Administrative Information (Prime Minister)

In a business with limited liability (SARL: titleContent(b) decisions are taken collectively by the partners. They may be taken in meetings, by collective consultation or by an act. In a one-person company with responsibility (EURL: titleContent), the decisions are taken by the sole member. We present the rules for these decision-making processes.

SARL

The possible modes of consultation are as follows:

What are the different assemblies?

Ordinary General Assembly (AGO)

At an ordinary general meeting (AGO), the partners may take the subsequent decisions :

  • Decide on the annual accounts
  • Allow the manager to perform certain operations for which authorization from the partners is required
  • Appoint or replace manager(s) or the auditor
  • Approving Regulated Agreements
  • Decide on matters which do not give rise to amendment of the statutes

One ordinary general meeting must take place at least once a year, 6 months after closing of each financial year business.

This ordinary annual general meeting (AGOA) is mandatory: it serves to close the annual accounts of the business.

This period may be extended, at the request of the manager, by order of the President of the Commercial Court acting on a request. There's no no civil penalty if the time limit is exceeded. The annual meeting which takes place after the six-month period remains valid.

Warning  

If the manager does not submit the accounts and, where necessary, the annual report, to the members, he shall be subject to a fine of €9,000.

Extraordinary General Assembly (AGE)

At an extraordinary meeting, the partners take decisions that modify the statutes of the business

Examples include:

  • Change the business purpose of the business
  • Increase in share capital
  • Change of registered office

Who can call the meeting of the partners?

Meetings shall be convened by the manager(s).

If the manager(s) cannot summon the partners, it may be one of the following:

  • Auditor, if there is one
  • Legal agent appointed by the partners

Where the business has no manager or the manager is guardianship , any member may convene the meeting to dismiss or appoint the manager of the business.

How are the meetings called?

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Summons by post

Summonses must be sent by registered letter at least 15 days before the meeting unless the statutes provide for a longer period.

The letter should indicate the meeting agenda.

A number of documents should also be sent to the partners to inform the partners of the decisions to be taken (agenda of the meeting, management report, etc.). They may vary depending on the type of meeting called.

Ordinary General Assembly (AGO) or Extraordinary General Assembly (AGE)

Within 15 days before the date of the meeting, the following documents must be sent to the partners:

  • Text of proposed resolutions
  • Manager Report
  • Where there is one, the auditor's report

FYI  

These documents must also be made available at the seat of the business.

Annual General Meeting (AGOA)

Within 15 days before the date of the meeting, the following documents must be sent to the partners:

  • Text of proposed resolutions
  • Management Report of the manager
  • Annual accounts
  • When the business belongs to a business group:
    • Consolidated accounts
    • Group Management Report
  • Where there is one, the auditor's report

FYI  

The inventory of the business must be made available to the partners at the business’s headquarters. They cannot make a copy of the document.

Electronic summons

Members can be called to a meeting electronically. They must be asked to do so, and they must give their consent at least 20 days before the next meeting.

When they agree, the partners are summoned by e-mail to the address they have given.

Summonses must be sent at least 15 days before the meeting unless the statutes provide for a longer period. The agenda of the meeting must be indicated.

Ordinary General Assembly (AGO) or Extraordinary General Assembly (AGE)

Within 15 days before the date of the meeting, the following documents must be sent to the partners:

  • Text of proposed resolutions (decisions to be taken)
  • Manager Report
  • Where there is one, the auditor's report

These documents shall also be made available at the seat of the business.

Annual General Meeting (AGOA)

Within 15 days before the date of the meeting, the following documents must be sent to the partners:

  • Text of proposed resolutions
  • Management Report of the manager
  • Annual accounts
  • When the business belongs to a business group:
    • Consolidated accounts
    • Group Management Report
  • Where there is one, the auditor's report

The inventory of the business must be made available to the partners at the business’s headquarters. They cannot make a copy of the document

How should an assembly take place?

The statutes must determine the place in which the meetings can be held. Otherwise, it will be up to the manager to choose the place.

Members may attend meetings in person, by videoconference or by any other means of telecommunication enabling them to be identified.

When a partner is not available, he or she may be represented by one of the following persons:

  • Spouse where both spouses are not the only partners in the business
  • Another partner when the business has 3 or more partners
  • If the articles of association so permit, another authorized representative

The statutes may provide for the cases in which those rules apply or do not apply for certain deliberations.

What are the majority rules for adopting decisions?

Ordinary General Assembly (AGO)

So that decisions are taken at ordinary general meetings majorities of votes are necessary:

  • During the 1re consultation : We need the absolute majority, i.e. more than half of the shares represented (1 vote = 1 share)
  • If the absolute majority is not reached, then a 2of consultation is being put in place: there needs to be relative majority, i.e. the most votes cast (1 vote = 1 social part)

Partners may decide in the statutes of the business to impose a stronger majority (e.g. 2/3), to discard the 2nde consultation or to impose an absolute majority at the secondnde consultation.

The articles of association may provide for ordinary general meetings to be held by videoconference or other means of telecommunication which enable shareholders to be identified.

Example :

In an assembly, in 1re consultation, 13 votes in favor of proposal A, 11 votes in favor of proposal B and 6 votes in favor of proposal C. In order to obtain an absolute majority, one of the proposals would have had to win 16 or more votes. No decision is adopted.

In 2of consultationHowever, the results are the same. Proposal A was adopted by a relative majority, as it received the most votes.

The meeting of an ordinary general meeting shall be only mandatory for the approval of the annual accounts of the business. For other types of decision, provision may be made for decisions to be taken by written consultations or any other means of consultation, or by unanimity in a decision. These methods of decision may be provided for in the statutes or chosen by the manager when the meeting is convened.

Warning  

Any decision not in conformity may be canceled at the request of any interested party.

Extraordinary General Assembly (AGE)

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Business created before August 4, 2005

Decisions must be made by 3/4 majority of votes (1 social share =1 vote) may be the number of partners present or represented at the decision-making stage.

Warning  

it is not possible to increase the majority in the statutes. This clause is deemed unwritten.

Business set up after 4 August 2005

A quorum is the minimum number of persons present or represented required for a vote or decision to be valid.

A quorum is the minimum number of persons present or represented required for a vote or decision to be valid.

Quorum condition

Partners present or represented must have at least one of the following minimum:

  • On 1re consultation: 1/4 of shares
  • If the 1re consultation is unsuccessful, at the 2ndof consultation: 1/5 of shares

It is possible to provide in the statutes for a quorum more important.

Majority condition

Decisions must be made by majority of 2/3 of the shares represented.

It is possible to provide for a larger majority in the statutes. However, it is not possible to choose unanimity.

Warning  

Any decision not in conformity may be canceled at the request of any interested party (e.g. a partner).

Should minutes be drawn up after each meeting?

At the end of each meeting of partners, a report.

It contains the next items :

  • Date and place of the meeting
  • Name, first name and role of the business manager
  • Names and forenames of members present or represented, indicating the number of shares held by each
  • Documents and reports submitted to the Assembly
  • Summary of the discussions
  • Texts of resolutions put to the vote
  • Result of votes

The minutes must be signed by the manager(s) and, where there is one, the presiding officer.

Each report must then be inserted in the CW register of the business.

The members may decide in the articles of association to take certain decisions by means of a written consultation.

What are the steps prior to the decision of the partners?

Before a decision by written consultation is taken, a number of documents must be sent to each of the partners.

These documents (management report, draft decisions submitted for voting, etc.) must be sent by registered letter.

The members must give their vote in writing within a period laid down in the articles of association. He usually runs from the receipt of documents.

How are decisions taken in a written consultation?

A decision shall be adopted where the members who took part in the vote represent more than half of the shares.

Example :

A business has 20 shares distributed among 4 partners. The partner A and the partner B each have 4 parts, the partner C at a7 and the partner D at a5.

If only partners A and B participate in the vote, they represent 8 shares out of the 20 shares of the business, the decision cannot be taken because they do not represent 50% business shares (20 x 50% = 10). On the other hand, if only partners D and C are present, they together account for more than half of the shares in the business, so the decision taken will be valid.

Should a report be drawn up?

One report must be established after a written consultation.

It contains the next items :

  • Date of decisions
  • Names and forenames of the members whose replies were received within the time limit and the number of votes held by each
  • Documents and reports submitted to partners
  • Date on which the documents were sent and the deadline for reply
  • Texts of resolutions to be adopted
  • Result of written consultation for each proposed decision (each reply must be appended to the minutes)

The minutes must be signed by the manager(s).

Each report must then be inserted in the CW register of the business.

In order to be adopted, the decision in an act must be taken at unanimity of the voters.

The deed must be signed by each partner.

EURL

Within an EURL, all decisions are taken by thesingle partner of the business. Such decisions shall be recorded in the register of decisions of the single member.

When the member takes a decision which modifies the statutes or the composition of the social bodies of his business, he must give his public decision. Indeed, it must be published on a legal listing support. The significant change must be entered in the Commercial and business Register (SCR) and the National company Register (NCR). The formality must be declared at the companies' formalities office:

Company Formalities Window

Each year, the single partner must also draw up an inventory of the annual accounts and where required, a management report. It then has to approve the accounts of the business.

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