In one of its decisions, the High Court in Prague answered the question whether a qualified shareholder may deliver their request to call the general meeting to the managing director by sending it to the managing director’s foreign address as given in the Commercial Register, or whether such a request must be delivered to the address of the company’s seat.
Section 197(1) of the Commercial Corporations Act states that a qualified shareholder, i.e. a shareholder or shareholders whose contributions amount to at least 10% of the share capital or 10% of the voting rights in a limited liability company, may request the managing director to call the general meeting to discuss issues raised by the qualified shareholder. If the general meeting does not convene within one month from the submission of such request even though it was duly delivered, and if at the same time the general meeting won’t convene within a reasonable period of time, the qualified shareholder is entitled to call the general meeting themseves pursuant to Section 187(2) of the Corporations Act.
If a qualified shareholder decides to ask the managing director to call the general meeting within the meaning of the above-mentioned provision, the practical issue may arise as to which address the request should be sent to, especially if the managing director’s address given in the Commercial Register lies abroad. Should the request to call the general meeting be sent to the address of the company’s seat or may the qualified shareholder send it directly to the executive at their foreign address registered in the Commercial Register?
The answer to this question was given by the High Court in Prague in one of its decisions which confirms that the request of a qualified shareholder to call the general meeting pursuant to Section 197(1) of the Corporations Act does not have to be delivered exclusively to the address of the company’s seat, but may indeed be delivered to the executive’s residential address registered in the Commercial Register, including if the executive’s address lies abroad.
With respect to the request of a qualified shareholder to call the general meeting, it should be noted however that that in order for the qualified shareholder to be able to call the general meeting themselves in the event that it is not convened within a given period of time as per Section 172(2) of the Corporations Act, the request must not only be sent, but also be duly delivered. For due delivery of the request, it is sufficient that the request come within the addressee’s reach (in the sense of their sphere of influence). The request will e.g. be deemed within the addressee’s sphere of influence if the addressee has been informed that mail addressed to them from a qualified shareholder is lodged for pick-up at the post office. In this context, one must assume that a problem may arise when it comes to proving that the request for a general meeting was indeed delivered to the foreign address of the managing director, at least in the case of certain countries.
Act No. 90/2012 Coll., on Companies and Cooperatives (Corporations Act)
Resolution of the High Court in Prague of 11 Februar 2021, Case No. 7 Cmo 87/2020. In: Obchodněprávní revue 2/2021, p. 143.