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An action under Article 74(1) of the Commerce Act is constitutive: it allows members and shareholders of a commercial company to have a resolution of its general meeting set aside where the resolution contravenes mandatory provisions of law or the company agreement and infringes the membership rights of the particular member or shareholder.<\/p>\n
It is for the affected member to decide whether to take proceedings to protect those rights and how far to pursue them. The member chooses both which resolutions to challenge under Article 74 and which breaches to rely on. Under the binding guidance in point 6 of Interpretative Decision No. 1 of 6 December 2002 of the Supreme Court of Cassation, the claimant must expressly identify and specify the grounds for setting a resolution aside. Each defect pleaded in the statement of claim, whether substantive or procedural, constitutes the basis of a separate Article 74 claim. Because Article 74(2) sets a time limit after which the right to bring such an action is lost, point 6 of Interpretative Decision No. 1\/2002 states that the court cannot consider or rule on additional grounds raised by the claimant after the deadline (see also the Supreme Court of Cassation\u2019s judgment in commercial case No. 860\/2009).<\/p>\n
In Article 74 proceedings the burden of proof rests on the defendant company, which relies on the resolutions and must prove the facts establishing that they were lawfully adopted. The court\u2019s review is confined to the grounds raised by the claimant. Under Interpretative Decision No. 1\/2002, it is the company that must prove that the resolutions are valid and that the meeting was lawfully held.<\/p>\n
Expulsion is the most severe sanction for a member\u2019s breach of statutory or contractual duties. That is why the member must first receive a written warning specifying the relevant breaches under Article 126(3), points 1, 2, 3 and 4 of the Commerce Act. The warning informs the member of the breaches identified in connection with participation in, or failure to participate in, the company\u2019s affairs. It also gives notice that the company may take steps to expel the member. As well as learning of the proposed expulsion, the member has an opportunity to prepare for the general meeting that will consider it. The warning may be a separate document, part of the notice convening the meeting under Article 139(1), or an entry in the minutes of an earlier general meeting attended by the member. The last option also satisfies the requirement of writing. The grounds stated in the notices may be identical or complementary, provided they reach the member sufficiently far ahead of the meeting to allow preparation of a defence. The law therefore does not require a general meeting to resolve that a warning be issued. The warning must specify the applicable ground or grounds under Article 126(3), points 1\u20134. It must give particulars appropriate to each ground: what the member failed to do to assist the company, which resolution or resolutions were not complied with, or what acts were contrary to the company\u2019s interests. See the case law under Article 290 of the Code of Civil Procedure, in particular Judgment No. 3 of 19 February 2010 in commercial case No. 482\/2009 of the Supreme Court of Cassation, First Commercial Division.<\/p>\n
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If you have received notice of a general meeting, have been expelled from a company or believe your rights as a member have been infringed, it is advisable to consult an experienced commercial lawyer.
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