Invalidation of decisions of general meeting of shareholders

Session of Judicial Chamber on commercial cases of the Supreme Court of Ukraine took place on the second of September 2014. The Chamber heard the case #3-39gs14 “On recognition of decisions, agreements and charters of companies as invalid”.

Ukrainian legislation in force provides company’s member (shareholder) with a right to take part in management of the company by means of participation in its meetings which are considered to be management body. The Supreme Court ruled that “failure to inform a member (shareholder) of business entity about holding of general meeting in accordance with the procedure provided in charter of the entity” is a serious violation of member’s (shareholder’s) rights and therefore serves as a ground for recognition of decisions made by the general meeting as invalid.

Article 10 of the Law of Ukraine “On business entities” provides that failure to inform a member (shareholder) of a company about calling/holding of general meeting as the result of which such member (shareholder) was deprived of membership is a serious and unconditional violation of rights.

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