Economic Foundations of the General Shareholders' Meeting

Abstract

This paper explores the functions of the General Shareholders' Meeting and raises doubts on a widely extended opinion sustaining that General Shareholders' Meeting has a leading role in corporate decision-making. Nevertheless, there is no such thing as a universal function of the General Shareholders' Meeting. The functions accomplished are highly dependent on the ownership structure of the corporations. Thus, in corporations with concentrated ownership the General Shareholders Meeting is the time and place in which the controlling shareholders duties of loyalty become effective affecting the decision-making process. Conversely, in corporations with a dispersed ownership, the General Shareholders' Meeting serves the purposes of controlling the Board of Directors, thus defending the interests of shareholders. Consequently, regulation attention should be drawn to the development of efficient tools for dealing with the different scenarios.

Keywords: Corporate Law, General Shareholders' Meeting, Ownership Structure