The minority convening right sits in sections 37 and 38 GmbHG. The articles can lower the threshold and expand agenda addition and information rights, but cannot cut short the written request, the fourteen-day period or the statutory self-convening route.
A minority shareholder in an Austrian GmbH needs a reliable path to a resolution where the management does not put a topic on the agenda or where an overdue decision remains open. The GmbHG addresses this in section 37 GmbHG with the convening request and the self-convening right, and in section 38 GmbHG with the form of the convening and the right to add to the agenda. These instruments have to be kept strictly apart from vetoes and from the challenge of a resolution already passed. The articles can lower the statutory threshold, refine the procedural steps and add information rights that prepare the request. They cannot cut short the statutory fourteen-day period or freely replace the self-convening route.
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Under section 37 paragraph 1 GmbHG the meeting has to be convened without delay where shareholders whose contributions reach one-tenth or the lower fraction of the stated capital set by the articles request the convening in writing stating the purpose. The statutory threshold sits at one-tenth; the articles can lower this threshold, they cannot readily raise it.
Under section 37 paragraph 2 GmbHG the entitled shareholders can, where the organs authorised to convene do not comply with the request within fourteen days after the demand or where no such organs exist, effect the convening themselves under communication of the underlying facts. The meeting decides whether the costs connected with the self-convening are to be borne by the company. This fourteen-day period is prescribed by statute and anchors any contractual complement.
Contractual freedom operates in a specific direction. The articles can lower the threshold, sharpen the statement of purpose, specify the mailing route and add reporting or information rights. They cannot shorten the statutory fourteen-day period or replace the self-convening route with a freely designed substitute.
The overall order of the resolution layer sits in the topic view on shareholder rights and voting rights. For the further preparation the checklist on voting rights and majorities orders the process.
The convening request under section 37 paragraph 1 GmbHG has to be brought in writing and has to state the purpose. In practice a letter that names the requesting shareholders with their contributions, states the purpose of the meeting with clear agenda points and formulates the intended resolutions as motion text is useful. The management then holds a workable basis for the convening.
The stated purpose is central. It has to be concrete enough for the management to prepare the agenda. Vague formulas risk that the request is regarded as not yet properly stated. Anyone who states the purpose precisely prevents formal disputes and supports an orderly convening under section 38 GmbHG.
The articles can refine the formal requirements, for instance handwritten signature or qualified electronic form. They can require annexes and proposed resolution wording. Such refinements bring predictability for both sides. They must not empty the underlying right in section 37 GmbHG.
For the interplay with other minority rights, Information package for minority shareholders is useful. Information and convening interact, because a workable purpose statement presupposes a reliable information base.
Under section 38 paragraph 1 GmbHG the convening of the meeting has to be announced in the manner set by the articles, or in the absence of such a provision to each shareholder by registered letter. Between the date of the last announcement or the date of posting and the date of the meeting there has to be a period of at least seven days. Under section 38 paragraph 2 GmbHG the purpose of the meeting has to be indicated as precisely as possible; where amendments to the articles are intended, the material content has to be stated.
This form applies to convening by management following a request as well as to self-convening by the minority. Anyone taking the self-convening route observes the statutory sequence, documents the mailing time and the recipient circle and initially bears the own costs; the decision on cost bearing by the company remains with the meeting under section 37 paragraph 2 GmbHG.
Under section 38 paragraph 6 GmbHG the meeting requires, unless law or the articles provide otherwise, that at least one-tenth of the stated capital is represented for it to be quorate. Under section 38 paragraph 7 GmbHG a second meeting on the same subject is convened where the first meeting is not quorate; that second meeting is basically quorate regardless of the level of capital represented.
For the further interaction with the articles and resolution documentation, Resolution minutes as evidence supplies the frame. For the link with amendments to the articles the checklist for preparing an amendment orders the flow.
Alongside the convening itself section 38 paragraph 3 GmbHG contains the right to add items to the agenda. Shareholders whose contributions reach one-tenth or the lower fraction set by the articles have the right, in a signed application stating the reasons, to require that items be added to the agenda of the next general meeting to be announced. The application must be filed no later than the third day after the point in time referred to in section 38 paragraph 1 GmbHG.
The addition is a right of its own alongside the convening. It only operates where the meeting has already been convened and serves to add further items to the agenda. Anyone who wants to trigger the convening itself pursues the request under section 37 paragraph 1 GmbHG.
Under section 38 paragraph 4 GmbHG resolutions can only be passed where their subject was announced in the manner prescribed for the convening at least three days before the meeting. Without such announcement resolutions require the presence or representation of all shareholders. Under section 38 paragraph 5 GmbHG proposals and discussions without a resolution do not require an announcement.
On reporting rights and information as preparation of the addition, Information package for minority shareholders supplies the matching building blocks.
The articles can build out the convening right for practice without shortening the statutory core. A common enhancement is lowering the threshold in section 37 paragraph 1 and section 38 paragraph 3 GmbHG to a lower fraction of the stated capital. The articles can also refine the mode of announcement, provided the requirements of section 38 paragraph 1 GmbHG are respected, and provide a reporting and information procedure that prepares the request.
A further building block is representation of the minority through a spokesperson. The articles can provide that minority shareholders name a shared spokesperson who submits the request, communicates with the management and coordinates the self-convening. That professionalises the process without every shareholder having to act individually.
On costs: under section 37 paragraph 2 GmbHG the meeting decides whether the costs connected with the self-convening are to be borne by the company. The articles can refine this discretion by ordering cost bearing by the company under defined substantive conditions. Made-up reimbursement claims do not belong in the articles.
On implementing such changes the checklist for preparing an amendment orders the flow. Anyone who considers a restatement will find the frame in Restating the articles instead of individual amendments.
The convening right is not a veto. It does not force the management to reach a specific outcome, but to convene the meeting. Whether the proposed resolutions actually pass with the required majority is a question of the vote. Keeping these two layers apart matters for the right expectation.
It is also not a resolution challenge. Anyone who wants to eliminate a resolution already passed has to challenge it under section 41 GmbHG within one month from the date of the mailing of the copy under section 40 paragraph 2 GmbHG. The convening right operates before the resolution, the challenge after the resolution.
Information rights operate on an even earlier layer. Without knowledge of the underlying position, a workable statement of purpose is difficult. The articles can equip that layer with tiered disclosure duties of the management and thereby prepare the request substantively. These instruments complement each other; they do not replace each other.
For an overall view on minority rights the combination of Shareholder rights and voting rights and the checklist on voting rights and majorities is useful. For a consent reservation in the articles Consent catalogue for investments, loans and credit lines orders the ground.
In a two-shareholder GmbH with a parity split both shareholders individually reach the statutory threshold in section 37 paragraph 1 GmbHG. The convening request and the self-convening are routine instruments where the management does not act. At the same time the risk of deadlock in day-to-day life is high, because individual issues can quickly reach an impasse.
The articles should regulate the flow with particular clarity. A short communication route, an orderly self-convening by the other shareholder and a chair mechanism that also holds against opposition help. On the roles in a two-person set-up Two-shareholder GmbH: roles and control is useful.
In more complex family GmbHs with several branches a spokesperson rule per family branch is worth considering. The articles can require each branch to nominate a spokesperson who signs the request. That reduces friction in the internal flow and accelerates the path to the meeting.
For sorting deadlock tools the topic view on deadlock and dispute prevention helps. For the fit with a growing shareholder circle Review the articles in a growing shareholder group is useful.
The convening right is subject to good-faith principles. The articles should preserve the base rule and only refine the formal steps. Dismissive deadlines or blocking periods should be avoided because they can undermine the statutory minority right in section 37 GmbHG in practice.
A periodic look at the design pays off. Growth, family changes, transfers and new topics can weaken the practical fit of a clause. A yearly rhythm along the annual review of the articles has proven useful, complemented by triggered reviews on friction points or on transfers.
For the practical preparation of convening and self-convening the checklist for the first consultation orders the starting position. For the resolution documentation after the meeting Resolution minutes as evidence provides the structure.
Anyone who wants to test the interaction with the wider majority regime will find the connection in Majority catalogue for fundamental GmbH decisions.
Under section 37 paragraph 1 GmbHG the requesting shareholders reach one-tenth of the stated capital with their contributions or the lower fraction set by the articles for that purpose. The articles can lower the threshold; raising it would erode the statutory right.
Under section 37 paragraph 2 GmbHG the self-convening right arises where the organs authorised to convene do not comply with the request within fourteen days after the demand or where no such organs exist. This fourteen-day period is prescribed by statute.
The self-convening follows the form of section 38 GmbHG, in particular the mode of announcement and the seven-day period between mailing and meeting date. The meeting decides under section 37 paragraph 2 GmbHG whether the connected costs are to be borne by the company.
Under section 38 paragraph 3 GmbHG shareholders whose contributions reach one-tenth or the lower fraction set by the articles can, in a signed application stating the reasons, require items to be added to the agenda of the next general meeting to be announced. The application must be filed no later than the third day after the announcement under section 38 paragraph 1 GmbHG.
The convening right operates before the resolution and serves to make the meeting take place. The challenge under section 41 GmbHG operates after the resolution and targets a resolution already passed, within one month from the mailing of the copy under section 40 paragraph 2 GmbHG.
Review and structure GmbH articles with Brandauer Rechtsanwälte in Austria.
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