Shareholders exercise their decision-making authority at the general meeting, which is the company’s highest decision-making body. The general meeting makes decisions on all significant and far-reaching matters concerning the company. It decides, for instance, on the amount of the housing company maintenance fee, significant renovations, approves financial statements, and elects the board.
According to the Limited Liability Housing Company Act, the regular general meeting must be held within six months of the completion of the financial statement. Additionally, the articles of association may specify the organization of extraordinary general meetings. Shareholders can also demand the convening of an extraordinary general meeting.
At the general meeting, decisions can only be made on matters mentioned I the meeting invitation or matters that, according to the articles of association, must be addressed in the meeting. Decisions are made by a majority of the votes cast, unless the articles of association or the limited liability housing act specify otherwise. Certain decisions, such as changes to the articles of association, require a qualified majority, which, according to the law, is two-thirds of the votes cast and shares represented at the meeting.
According to the Limited Liability Housing Company Act, a shareholder can challenge an erroneous decision of the general meeting if it involves a significant procedural error or if the decision is otherwise in violation of the law or the articles of association. Legal action against the company must be initiated in the district court within three months of the decision.
However, certain types of erroneous decisions are considered so significant under the Limited Liability Housing Company Act that they can be challenged regardless of the three-month deadline. This is the case, for instance, if the meeting invitation was not delivered, or if other related regulations were violated, if the required shareholder consent was not obtained, or if the decision violates the principle of equality. In such cases, in addition to the shareholder, the board, a board member, or the property manager can also initiate legal action against the company to declare the decision null and void.