LLC general meeting in Morocco: notice, quorum and minutes

Types of general meetings in the SARL

Law 5-96 on the SARL distinguishes two categories of general meetings, according to the nature of the decisions to be taken.

The ordinary general meeting (OGM / AGO)

The OGM meets at least once a year, within six months following the close of the accounting year. It is competent to rule on the company’s ordinary decisions:

• Approval of the annual accounts: balance sheet, income statement (CPC), statement of management balances (ESG), and ETIC;
• Appropriation of the result: distribution of dividends, allocation to the legal reserve (5% of net profit until it reaches 10% of capital), retained earnings;
• Appointment and removal of the manager: designation of the manager(s), fixing of their remuneration;
• Approval of regulated agreements: agreements concluded between the company and one of its managers or shareholders;
• Appointment of the statutory auditor (CAC): mandatory if turnover exceeds 50 million DH excluding tax at the close of a financial year.

The extraordinary general meeting (EGM / AGE)

The EGM is convened whenever a decision requires amendment of the company’s bylaws. Decisions falling within the EGM include in particular:

• Amendment of the corporate purpose or the company name;
• Capital increase: by cash contributions, contributions in kind, or capitalization of reserves;
• Capital reduction: to absorb losses or repay shareholders;
• Transformation of the SARL into another legal form (SA, SAS, etc.);
• Early dissolution of the company;
• Merger or demerger;
• Transfer of the registered office to another city.

Convening the general meeting

Who convenes the GM?

Convening the general meeting is in principle the responsibility of the company’s manager (Art. 71 of Law 5-96). It is the manager who sets the date, place, and agenda of the meeting.

In the event of the manager’s failure to act, the general meeting may be convened by:

• Shareholders representing at least 25% of the share capital: they may request the manager to convene a GM. In the event of refusal or silence by the manager within 15 days, these shareholders may apply to the competent court;
• The commercial court: upon petition by any shareholder, the court may appoint a representative charged with convening the meeting, in case of urgency or deadlock.

The statutory auditor, where one exists, may also convene the general meeting in the event of the manager’s default.

Form and notice period for the convening notice

The convening notice must comply with strict conditions of form and timing:

• Form: registered letter with acknowledgment of receipt addressed to each shareholder. The bylaws may provide for other modes of convening (email, hand delivery against receipt), provided that each shareholder has expressly accepted the principle;
• Notice period: the convening notice must be sent at least 15 days before the scheduled date of the meeting. This period runs from receipt of the registered letter;
• Content: the convening notice must state the date, time, place, and agenda of the meeting. The resolutions to be put to the vote must be clearly identified.

The agenda

The agenda is set by the author of the convening notice (the manager, or the shareholders/court in the event of failure to act). It determines the points on which the shareholders are called to deliberate.

Important rule: shareholders may not vote on resolutions on matters that do not appear on the agenda. Any decision taken outside the agenda is null. Shareholders may, however, ask the manager to add additional items to the agenda, provided that this request is made before the convening notice is sent.

Quorum and majorities

OGM: quorum and majority

Article 74 of Law 5-96 sets the quorum and majority rules for the OGM:

• First notice: quorum of 50% of the company units. Decisions are taken by a majority of 50% + 1 of the units represented;
• Second notice (in the event of failure to meet the quorum): no quorum is required. Decisions are taken by a majority of 50% + 1 of the units represented, regardless of the number of units present or represented.

EGM: reinforced majority

Article 75 of Law 5-96 imposes a reinforced majority for extraordinary decisions:

• Decisions are taken by a majority of three-quarters (75%) of the share capital;
• No separate quorum: the law directly requires that favorable votes represent 75% of the company’s total capital, and not 75% of the units present;
• Exception: a change of the company’s nationality and an increase in the shareholders’ commitments require the unanimity of the shareholders.

Voting

Each shareholder has a number of votes proportional to their participation in the share capital. Voting by correspondence is not expressly provided for by law, but written consultation constitutes an alternative (see below).

A shareholder may be represented by another shareholder or by their spouse, unless otherwise provided in the bylaws. Representation by a non-shareholder third party is not authorized, unless otherwise provided in the bylaws.

Written consultation: an alternative to an in-person meeting

Article 71-1 of Law 5-96 provides for the possibility of taking decisions by written consultation of the shareholders, in lieu of a physical meeting. This mechanism is particularly useful for SARLs whose shareholders are geographically distant.

Conditions for written consultation

• The bylaws must authorize this decision-making method;
• The manager sends each shareholder the text of the proposed resolutions, accompanied by the documents necessary to inform the shareholders;
• Each shareholder has a period of 15 days from receipt of the documents to send their vote (approval or rejection);
• Failure to respond within the period constitutes rejection of the resolution.

Limits of written consultation

Written consultation may not be used for:

• The annual approval of the accounts: this decision necessarily requires the holding of a meeting (Art. 70);
• The removal of the manager: this decision requires adversarial debate.

The general meeting minutes

Obligation to draft minutes

Every general meeting, whether ordinary or extraordinary, must give rise to the drawing up of minutes (PV). This document constitutes proof of the decisions taken and binds the company vis-à-vis third parties.

Content of the minutes

The minutes must contain the following information:

• The date, time, and place of the meeting;
• The method of convening and compliance with the statutory notice period;
• The agenda as it appeared in the convening notice;
• The list of shareholders present or represented, with an indication of the number of units held by each;
• The quorum reached;
• The text of the resolutions put to the vote;
• The result of the votes for each resolution (number of votes for, against, abstentions);
• A summary of the debates and significant interventions.

Formalities

• The minutes are signed by the manager and, where applicable, by the chair of the meeting if that person is different from the manager;
• They are transcribed in a special numbered and initialed register, kept at the company’s registered office;
• Copies or extracts of minutes certified as true by the manager are authoritative vis-à-vis third parties (banks, tax administration, commercial court).

Shareholders’ rights

Right to prior information

Article 70 of Law 5-96 guarantees shareholders an enhanced right to information before any general meeting. The manager must communicate to the shareholders, at least 15 days before the annual meeting:

• The manager’s management report on the company’s activity during the past financial year;
• The annual accounts (balance sheet, CPC, ESG, ETIC);
• The statutory auditor’s report, if the company has appointed one;
• The text of the proposed resolutions.

Right to ask written questions

Shareholders have the right to ask written questions of the manager, who is required to answer them during the meeting. These questions must be addressed to the manager within a reasonable time before the date of the meeting.

Right to request a management audit

Any shareholder holding at least 10% of the share capital may apply to the court for the appointment of an expert charged with presenting a report on one or more management operations. This right constitutes a mechanism for protecting minority shareholders.

Support from a chartered accountant is essential to secure the operation of SARL general meetings. At LegalStation, we assist managers in preparing the annual accounts, drafting the minutes, and complying with legal obligations.

Frequently asked questions

Can an absent shareholder vote at a SARL general meeting?

Yes, an absent shareholder may be represented by another shareholder or by their spouse, by giving them a written proxy. Written consultation (Art. 71-1) also constitutes an alternative when provided for in the bylaws. By contrast, voting by correspondence is not expressly provided for by Law 5-96, unless the bylaws authorize it.

What happens if the quorum is not reached at an OGM?

If the 50% quorum is not reached at the first notice, the manager may convene a second meeting within a reasonable time. At this second notice, no quorum is required: decisions are taken by a majority of 50% + 1 of the units represented, regardless of the number of units present. For the EGM, the majority of 75% of the total capital remains required in all cases.

Must the general meeting minutes be filed with the commercial court?

The minutes themselves are not subject to systematic filing with the commercial court. However, when the GM’s decisions result in an amendment of the bylaws (change of manager, capital increase, amendment of the corporate purpose, etc.), the manager must proceed with an amending registration at the commercial register and the filing of the updated bylaws. The minutes then serve as supporting documentation with the registry.