The Extraordinary General Assembly of joint stock companies is the holder of the supreme authority in the company. It has several competencies, including reducing the company’s capital, or increasing the authorized capital, and it may amend the company’s founding contract and articles of association, and sell the entire project for which the company was established or dispose of it in any way. On the other hand, it may dissolve the company, merge it with another company, transform it, or split it.
The Kuwaiti legislator stipulated the powers of the extraordinary general assembly of the joint-stock company in Companies Law No. 1 of 2016 and its executive regulations, which are as follows:
Company contract modification
Article No. 218 of the Kuwaiti Companies Law authorized the extraordinary general assembly to amend the joint-stock company’s articles of association and articles of association, whether by extending its term, shortening it, or dissolving it, and adding other purposes related to the original purpose at the request of the shareholders.
Modification of rights, privileges, or restrictions on the shares
The Extraordinary General Assembly may amend the rights, privileges or restrictions related to a particular type of shares stipulated in the company’s contract, with the approval of two thirds of the holders of the type of shares to which the amendment relates.
The extraordinary general assembly is responsible for approving the division of the company’s shares, and the Capital Markets Authority is notified of the approval decision by the company.
Increasing the share capital of the joint stock company
The Kuwaiti Companies Law authorized by a decision issued by the Extraordinary General Assembly to increase the authorized capital of the company, based on a reasoned proposal from the Board of Directors and a report from the auditor in this regard. The decision issued by the Assembly to increase the capital must include the amount and methods of increase.
The authorized capital may not be increased unless the value of the original shares has been paid in full, and the extraordinary general assembly has the right to authorize the company’s board of directors to determine the date of implementation of the decision issued to increase the capital.
The Ordinary General Assembly may also decide to add an issue premium to the nominal value of the new shares to be allocated to meet the issuance expenses and then added to the reserve. It may decide a privilege for the increase shares if the company’s contract authorizes this, and the resolution must include the type of privilege granted to the shares.
Reducing the share capital of the joint stock company
The Extraordinary General Assembly of the joint-stock company, based on a reasoned proposal from the Board of Directors, may decide, after the approval of the Capital Markets Authority, to reduce the company’s capital, either by reducing the nominal value of the shares or by reducing the number of shares or by the company’s purchase of its shares . Provided that the shareholders’ obligations are not increased, and the decision does not affect the basic rights of the shareholder that he derives as a partner, and the reduction of the company’s capital is in the event that the capital exceeds its need, or if the company suffers losses that are not likely to be covered from the company’s profits, or in the event of a decision to divide company.
Authorizing the company to return the nominal value of its shares
The joint stock company may, after obtaining the approval of the extraordinary general assembly, return the nominal value of some of its shares to the shareholders, and this value shall be taken from the undistributed profits and the voluntary reserve of the company. Owners of the spent shares are granted enjoyment shares that have all the rights prescribed for ordinary shares, except for the recovery of the nominal value upon liquidation of the company.
Creation of dividends in the joint stock company
The Extraordinary General Assembly may issue a decision to establish dividends in exchange for amounts provided without interest to the company after its incorporation, and the owner of the profit share is not a partner in the company, and shall not have any of the rights of shareholders during the existence of the company or upon its liquidation, except for the share of profits assigned to him.
Selling all the project for which the company was built
The Extraordinary General Assembly of joint stock companies has the right to sell the entire project for which the company was established or dispose of it in any other way.
Dissolution of the company, its merging with another company, its transformation or division
The Kuwaiti Companies Law authorized the extraordinary general assembly to dissolve the company or merge it with another company, and in the event of its approval of the merger of the joint-stock company. Publication procedures are taken and the decision is not effective until thirty days have elapsed from the date of publication. It may also issue a decision to divide the company, including the number of shareholders or partners, their names, the share of each of them in the companies arising from the division, the rights and obligations of these companies, and how assets and liabilities are distributed among them.
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