sou · GJB344 · 1996-01-01 00:00:00 — The objective is a completely new Companies proposes in this report that the Act´s provisions on general meetings, management of the company, auditing and damages be completely reworded. The proposals call for changes in the current law, which is now twenty years old. The new provisions differ stylistically to a great degree from the rest of the law. The language is more modern, the paragraphs shorter and headings are used frequently to make the Act easier to read and understand. The stylistic contrast between the new and old chapters stemming from the proposal is only temporary. is working with its sights on a completely new Companies Act, in which the proposed chapters would be included. Act should encourage a continuous, rapid adaption of companies´ organisations and their businesses to changes in the business environment. With this in mind, the Committee is emphasizing the importance of an ownership role. Act must guarantee owners the ultimate right of decision in their companies and allow for changes in ownership structures. Act should also provide owners with the opportunity to upphold their interests vis-à-vis the companies´management. To underscore the importance of the role of owners, the Committee proposes that the general meeting, which is the forum in which owners can exercise their right of decision, shall be addressed in the Act prior to the provisions governing the management of the company. Act must also maintain a certain balance between various owner interests. Minority shareholders must be ensured protection against improper measures by the majority. It is important, however, that the rules are formulated in such a way that inconsequential minorities cannot prevent decisions that a large majority of the shareholders support. has therefore formulated its proposals to counterbalance majority and minority interests. General meetings of shareholders The highest ranking decision-making body of the corporation is the general meeting of shareholders. The voting strength of each shareholder at the meeting is correlated to the size of his holding, as well as the rights conferred by the class(es) of shares he holds, among other things. Act presumes that all shares carry the same rights in the company. However, a company´s articles of association may provide for shares of more than one class that differ, for example, in their voting rights. No share may carry more than ten times the voting rights of any other share of the same company. Companies which issued shares with a greater differentiation in voting rights in accordance with older provisions may, however, continue to issue shares with those same voting rights. Differentiated voting rights facilitate a strong ownership role, even in very large companies. therefore dismisses the notion of restrictions or further limitations on the right to issue shares with different voting rights. The rights conferred upon each shareholder at a general meeting are also affected by provisions governing voting right limitations. The chief rule of the Companies Act is that no shareholder may vote for more than one-fifth of the shares represented at the meeting, unless otherwise stipulated in the articles of association. Voting right limitations have a completely different effect than differentiated voting rights. They impair rather than enhance an ownership role and increase the risk of isolating the company´s management from monitoring by the owners. therefore proposes that the Act´s chief rule be changed to conform with the practice routinely used today, whereby each shareholder may vote for the full number of shares that he owns or represents. Act currently allows the board of directors to solicit proxies prior to the meeting at the company´s expense. This provision can negate desirable changes and lead to a perpetuation of existing ownership and management structures. is therefore proposing a restriction against the solicitation of proxies at the company´s expense. For the same reasons, new owners should be able to quickly implement changes in a company, for example, replacing the old board with a new one. proposes that in public companies it always be possible to remove directors who are elected by the general meeting with a simple majority. Provisions in the articles of association that require a qualified majority for the dismissal of directors would be forbidden. Strengthening the role of the owners, as is intended by the Committee´s proposals, also raises the chances of abuse by the majority. However, the proposals are balanced by new rules for general meetings that improve the opportunity for minority shareholders to uphold their interests relative to the majority. Among the proposals on meeting procedures that stand out are that the notice of the meeting shall be made earlier than is currently the case, that the notice – when necessary – shall contain information on proposals that have been put forth that would mean significant changes in the company´s operations, and so on. This gives shareholder minorities a greater opportunity to prepare for the meeting. In order to adapt the Act to what can be said to be a European standard, companies as of January 1, 1995 are divided into two categories, public and private companies, or "aktiebolag" in Swedish. proposes that this arrangement now serve as the basis for the Act´s provisions on companies´ management organisations. For public companies, the Committee proposes that a two-tier structure consisting of a board of directors and a managing director, be made mandatory. For private companies, which as a rule have a very limited and stabile ownership structure, the legislature should grant a larger leeway for the owners to decide on an appropriate management therefore proposes that only one management level be mandatory for private companies, i.e. a board of directors. The board of public companies, according to the proposal, should have at least three members, while in private companies one or two members shall be sufficient, if at least one deputy member is appointed. is not presenting any proposal with regard to nominating committees. It would seem advisable to await the outcome of the recommendations of the Industry and () in this area. To better enable shareholders to judge the suitability of board candidates, however, the Committee proposes that the general meeting of all corporations be informed prior to the election of directors of the positions the candidates hold in other companies. Act´s current provisions on the authorities and duties of the company organs are seen as unclear. This is particularly true of the provisions governing the board and the managing director. Public demands have been made for a clarification from legislators, in order to facilitate issues of liability. Against this background, the Committee is proposing certain provisions for the purpose of clarifying and defining the duties and responsibilities of the members of the board and the managing director. In terms of the board of directors, the Committee is proposing that the Act establish from the beginning that the board is responsible for the company´s organisation and management of the company´s affairs, and that it shall ensure that the company´s organisation is designed in such a way that accounting, cash management and the company´s financial condition in other respects are controlled prudently. It is also proposed that an express provision be introduced in the Act stating that the board shall continuously assess the company´s financial position. This obligation would be tied in with a special provision entrusting the board to establish a reporting system that can provide it with the information it needs to fulfill its duties. Such a system should naturally be linked with routines so that the board would meet prior to the release of reports to approve their contents, discuss the company´s development and decide on actions. did not want to restrict the boards of Swedish corporations with a detailed listing of duties, since circumstances vary greatly between companies of different size, in different industries, and so on. It is beneficial, however, that the delegation of responsibilities among the board members and the various routines of the board are documented, so that the directors can more easily be held responsible for the company´s management. is therefore proposing that a provision be introduced in the Act that directs the board to establish procedures for its work. Included, among other things, would be rules for the delegation of responsibilities among the board members, if such a delegation is needed. This means, for example, that if the company has a working chairman, his duties would be stipulated in the procedures. To ensure that the directors are familiar with the procedures, they will be approved one year at a time. If circumstances warrant, they may be revised during the year. If a corporation has a managing director, he shall be responsible for the company´s day-to-day management. proposes that the board, in its directives for the managing director, specify the division of responsibilities between itself and the managing director. If the scope and nature of the company´s business necessitate, the board should also issue directives for other individual officers, such as the deputy managing director and high-level executives in the company. A board which decides that the company´s organisation shall permanently include a group of people who will have the right to decide on certain matters of great importance to the company should also be obliged to define the duties, working methods and reporting obligations of such a group in its directives. This may apply for example, to an audit committee. Through directives of this type, the board can create an organisation that leaves no doubt as to the division of responsibilities among the directors and between the board, the board´s working committee, the chairman, the managing director, divisional boards and any other decision-making bodies in the organisation. A question that is often raised is whether a person who is a director of two companies should be disqualified from decisions involving, for example, agreements between the companies. In and itself, this is not a basis for disqualification according to Swedish law. This means, for example, that a director of a bank or other credit institution who is also a director of an industrial company may take part in a decision by the industrial company´s board to raise a loan from the credit institution. finds this to be unsatisfactory and instead proposes that the Act adopt express provisions on the disqualification of both members of the board and the managing director in this respect. The provisions of the Companies Act with regard to audits and auditors conform in their essentials to the corresponding rules of other European nations and serve for all intents and purposes in a satisfactory . A much-debated issue of late is whether the audit requirements should be eliminated for small businesses. The reasons usually given for doing so are that an audit is a significant expense for a company and that the need for control from the standpoint of the shareholders is not as evident in companies where the part- owners themselves often work. , however, questions the validity of these arguments. An audit is rendered not only for the benefit of the company and its owners, but also for its employees, creditors and other third parties. It is also unclear to what extent an audit genuinely is a burdensome expense to a small business. Exempting small businesses from having to perform an annual audit would greatly increase the risk of white collar crime and other improprieties in such companies. therefore proposes that the audit requriement not be tampered with. As regards the appointment and dismissal of auditors, the Committee is proposing changes in the auditor´s mandated term. At present there are no limits on the term for which an auditor may be elected. Normally it is one year, but it can be considerably longer. questions whether this provision properly safeguards an auditor´s impartiality. Too short a term can make the auditor´s position tenuous, while a very long or even unlimited term over time can cause such a close alliance between the auditor and those he is supposed to monitor that his audits suffer as a consequence. therefore proposes that auditors always be appointed for a four- year term. Auditors are elected by the general meeting. arguments why other countries have established audit committees, whose primary purpose is to limit the management´s influence over the election of auditors, are not valid at present in this country. therefore is not making a proposal with regard to audit committees. Among the more frequently discussed issues involving auditors in recent years is to what extent an auditor may act as an advisor to a company that he has been appointed to examine. is not proposing any limitations in this respect, but nevertheless feels that it would be in the interests of shareholders and other parties with ties to the company to be aware of the extent to which an auditor has counselled a company he also audits. therefore proposes that every company specify in its annual report whether their auditors or the accounting firm with whom their auditors are affiliated have provided consulting services to the company. Public companies should also report the total consulting fees they pay. A disclosure requirement of this type provides shareholders with a better basis by which to judge whether the auditor is sufficiently unbiased. also proposes that auditing fees always be reported in the annual report. feels that the scope of the auditor´s examination should be clarified through an express provision that the audit report contain a statement whether the annual report gives a true and fair view of the company´s financial position and earnings. The fight against white collar crime must be fought vigorously. In this as in other areas the for efficiency has to be weighed against demands for due respect for the law. This balance is not a given at all. For example, there is some debate as to how extensive an auditor´s confidentiality should be. At present, it prevents an auditor from reporting to the criminal offenses he may have come across in his examination and which he may even have remarked on in his audit report. finds this unacceptable and therefore proposes that if an auditor remarks on a situation in his audit report and, furthermore, has reason to believe that it constitutes a crime or an element of a crime and involves significant damage or risk of such damage, he should be obligated to advise the prosecutor of it. A recurring criticism of the Companies Act is that actions are rarely taken to collect damages against companies, even, according to critics, in cases of flagrant neglect on the part of the management or auditors. And, in the rare cases where actions are taken, the damages awarded to the plaintiff usually are disproportionately low in relation to the costs of the suit, the time expended and the risks always involved in filing a suit. realises therefore that the expectations of new, stricter damage provisions are high. In this as in many other areas however, it is important to strike a balance. If a company´s directors are charged with what is percieved as almost unlimited responsibility for the company´s losses and if the requirements, for example, by which a minority may take legal action against the company´s management are eased by creating more advantageous rules as regards the court costs incurred by the minority or in other ways, it would be difficult or perhaps even impossible to recruit competent individuals to company boards. We cannot forget, either, that companies operate in a market economy and that all business involve risk-taking. Damage provisions should not be designed in such a way that a board avoids takings risks that it might consider acceptable from a business standpoint for fear of personal liability for damages should such lead to a loss for the company. has reviewed the current law and laws in other countries and, to summarize, has found no reason to deviate from the principal basis with regard to directors´ and the managing director´s liability for damages to the company on which current law rests. In the opinion of the Committee, there is no reason to dictate the liability of the members of the board and the managing director in this respect in any way other than has already been done in current law. By necessity, the wording of the law must be general enough to cover the full range of situations for which it is intended. The determination of liability for damages based on a rule established in law but general in nature with regard to negligence (culpa) is also the case with most of the foreign laws studied by the Committee. Interpretations of the meaning and implications of the culpa rule in concrete situations will rest, as previously, with principles established through decisions of the courts. Acceptance of the principles of the current regulations on damages does not mean, however, that the Committee believes things should simply remain the way they are. The proposed provisions on management organisations impose on the board the responsibility, through its directives, to devise the organisation in such a way that there is a clear-cut division between the board, the board´s working committee, the managing director, divisional boards and other decision-making bodies of the organisation. By defining and documenting the roles of the various decision-making bodies in this , there are better chances of instituting a claim for damages against the company´s directors and officers. finds no reason, either, to change the current rule regarding responsibility to others than the company. The courts should still be consulted in individual cases to determine what categories of third parties are protected by the provision of law or any provisions in the articles of association that the directors and officers claim to have agreed upon. The reasons given earlier by legislators to justify a short statute of limitations in questions of company law where claims for damages by a company have no basis in criminal liability must, in the opinion of the Committee, weigh heavily. From experiences gained in connection with the investigation of potentially negligent lending activities by a few major banks at the end of the 1980s and beginning of 1990s, however, it would seem that a three-year limit on actions against directors or officers, among others, sometimes can be too short to allow for a thorough investigation of potential future actions for damages by the company. therefore proposes that the statute of limitations on actions for damages be extended from three to five years. In principle, the Committee feels that only such offenses against the Companies Act that are serious in nature but are not covered by the criminal code should be penalized. therefore is proposing only minor adjustments in the list of crimes covered by the Companies Act. Om vid konstituerande stämma ej visas att teckning och tilldelning av aktier skett motsvarande aktiekapitalet eller minimikapitalet enligt stiftelseurkunden, är frågan om bolagets bildande förfallen.Uppkommer på den konsti- tuerande stämman fråga om ändring av bolagsordningen eller stiftelseurkunden i övrigt, kan beslut om bolagets bildan- de icke fattas förrän frågan blivit avgjord. Ändring i bo- lagsordningen som ej enligt 9 kap. 9 § tredje stycket angivits i kallelsen eller som avser höjning av aktiekapitalets eller maximikapitalets storlek kan ej ske utan samtycke av samtliga stiftare och aktietecknare. Det- samma gäller ändring av be- stämmelse i stiftelseurkunden som avses i 3 §. Lag om ändring i aktiebolagslagen (1975:1385) Härigenom föreskrivs att 2 kap. 8 §, 6 kap. 2a §, 8, 9 och 10 kap., 11 kap. 3, 5, 9, 11-13 och 16 §§, 12 kap. 5 §, 13 kap. 12, 14 och 15 §§, 14 kap. 20 och 30 §§, 15 kap., 17 kap. 1 och 2 §§, 18 kap. 4 och 7 §§ samt 19 kap. 1 § aktiebolagslagen (1975:1385) skall ha följande lydelse. Om stiftarna inte vid konsti- tuerande stämma visar att teckning och tilldelning av aktier skett motsvarande aktie- kapitalet eller minimikapitalet enligt stiftelseurkunden, är frågan om bolagets bildande förfallen. Uppkommer på den konsti- tuerande stämman fråga om ändring av bolagsordningen eller stiftelseurkunden i övrigt, kan beslut om bolagets bildan- de inte fattas förrän frågan blivit avgjord. Ändring i bo- lagsordningen som inte enligt 8 kap. 13 § angivits i kallelsen eller som avser höjning av aktiekapitalets eller maximika- pitalets storlek kan inte ske utan samtycke av samtliga stiftare och aktietecknare. Det- samma gäller ändring av be- stämmelse i stiftelseeurkunden som avses i 3 §. Om tecknare med flertalet avgivna röster och två tredjedelar av de vid stämman företrädda aktierna biträder beslut att bilda bolaget, är bolaget bildat. I annat fall är frågan om bolagets bildande förfallen. När aktiebolaget är bildat, skall styrelse och revisorer väljas. I övrigt skall i fråga om konstituerande stämma i tillämpliga delar gälla föreskrifterna om bolagsstämma i denna lag och bolagsordningen. om det har biträtts av om det har biträtts av aktieägare med två tredjedelar aktieägare med två tredjedelar av såväl de avgivna rösterna av såväl de avgivna rösterna nedsättning enligt 8 § gäller 9 nedsättning enligt 8 § gäller 8 kap. 13 §. kap. 26 §. Innebär nedsättningen att rättsförhållandet mellan redan utgivna aktier rubbas, är beslutet giltigt, om det har biträtts av samtliga vid stämman närvarande aktieägare företrädande nio tiondelar av aktierna. I följande fall räcker det för giltigt beslut att det har biträtts av aktieägare med två tredjedelar av såväl de avgivna rösterna som de på stämman företrädda aktierna, nämligen om 1.nedsättningen försämrar endast viss eller vissa aktiers rätt och samtliga vid stämman närvarande ägare av dessa aktier företrädande nio tiondelar av alla sålunda berörda aktier godkänner nedsättningen, eller 2.nedsättningen försämrar endast helt aktieslags rätt och ägare till hälften av alla aktier av detta slag och nio tiondelar av de på stämman företrädda aktierna av detta slag godkänner nedsättningen. Utövande av aktieägares rätt i bolaget 1 § Aktieägarnas rätt att besluta i bolagets angelägenheter utövas vid bolagsstämma. Rätten att delta i bolagsstämma tillkommer aktieägare som för stämman är införd i aktieboken. I avstämningsbolag gäller dock att den har rätten att delta som upptagits som aktieä- 1 Kapitlet har fått en helt ny utformning. gare i sådan utskrift av aktieboken avseende förhållandena före stämman som avses i 3 kap. 13 § andra stycket. Aktie som tillhör bolaget eller dess dotterföretag kan inte före- trädas vid bolagsstämman. Sådan aktie skall inte räknas när det i denna lag eller i bolagsordningen för giltigt beslut eller för utövande av befogenhet föreskrivs samtycke av ägare till en viss del av aktierna i bolaget. 2 § I bolagsordningen får bestämmas att aktieägare för att få delta i bolagsstämma skall anmäla sig hos bolaget senast den dag som anges i kallelsen till stämman. Denna dag får inte vara söndag, annan allmän helgdag, lördag, , eller nyårsafton och inte infalla tidigare än femte vardagen före stämman. enligt första stycket skall också gälla biträde åt aktieägare. 3 § En aktieägares rätt vid bolagsstämma utövas av aktieägaren personligen eller genom ombud med skriftlig, daterad fullmakt. En fullmakt gäller högst från utfärdandet. Fullmakter får inte samlas in på bolagets bekostnad. Varje aktieägare eller ombud får vid bolagsstämma medföra högst två biträden. Biträden får yttra sig på stämman.