The Silent Shareholder
BVBA 'Groenlicht' is a small renewable energy company with three shareholders: Ann (50%), Ben (30%), and Chris (20%). The articles of association require that any transfer of shares to a non-shareholder be approved by a 75% majority of shareholders. In April 2024, Chris wants to sell his 20% to Diana, an outsider. Ann agrees, but Ben refuses. Chris argues that because Ann holds 50%, her approval alone exceeds the 75% threshold when combined with his own 20% (since he would vote in favor). The board of directors, dominated by Ann, calls a general meeting for 15 May 2024. At the meeting, Ben is absent. Ann and Chris vote in favor of the transfer, representing 70% of the shares. The meeting approves the transfer. Ben later challenges the decision, arguing that the approval requirement was not met and that the meeting was invalid because he did not receive proper notice (the notice was sent by email on 10 May, only five days before the meeting, while the articles require 15 days' notice).
1. Was the transfer approved by the required majority? Analyze the voting rules and whether Chris's own shares can be counted.
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The transfer was not approved by the required majority. The articles require a 75% majority of shareholders for transfers to non-shareholders. At the meeting, only Ann (50%) and Chris (20%) voted in favor, totaling 70%. Chris's shares can be counted because he is a shareholder, but the articles do not exclude his vote. However, even with his vote, the total is 70%, below 75%. Chris's argument that Ann's 50% alone combined with his 20% equals 70% is mathematically correct, but 70% is less than 75%. Therefore, the approval fails. The fact that Ben was absent does not change the denominator; the majority is calculated on the total shares, not on those present. Thus, the transfer was not validly approved.
2. Was the general meeting validly convened? Discuss the notice period and the consequences of defective notice under Belgian company law.
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The general meeting was not validly convened. The articles require 15 days' notice, but the notice was sent by email on 10 May for a 15 May meeting, only five days. Under Article 5:83 of the Companies and Associations Code (CAC), the notice period for a general meeting in a BV must be at least 15 days, and the articles may not shorten it. Defective notice renders the meeting invalid unless all shareholders waive the defect. Ben did not waive it; he was absent and challenges the decision. Therefore, the meeting's resolutions are voidable. Ben can request the court to annul the decisions. Consequently, the approval of the transfer is invalid on this ground as well. The transfer to Diana cannot proceed without a validly convened meeting and a 75% majority.