SARL General Meeting in Morocco: Notice, Quorum and Minutes

In brief: The general meeting is the sovereign body of the SARL in Morocco. Governed by Articles 69 to 75 of Loi 5-96, it comes in two forms: the OGM (approval of accounts, allocation of results, appointment of the manager) and the EGM (amendment of articles of association, capital increase or reduction). The quorum is 50% at the OGM (first notice) and the majority required at the EGM is 75% of the share capital (Art. 75).

Types of general meetings in the SARL

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

The ordinary general meeting (OGM)

The OGM meets at least once a year, within six months following the close of the financial year. It is competent to decide on the company’s routine matters:

Approval of the annual accounts: balance sheet, income statement (CPC), management balance statement (ESG) and ETIC;
Allocation of results: distribution of dividends, transfer to legal reserve (5% of net profit until reaching 10% of capital), carry-forward;
Appointment and dismissal of the manager: designation of the manager(s), determination of their remuneration;
Approval of regulated agreements: agreements entered into between the company and one of its managers or members;
Appointment of the statutory auditor (CAC): mandatory if turnover exceeds 50 million MAD excluding VAT at the close of a financial year.

The extraordinary general meeting (EGM)

The EGM is convened whenever a decision requires an amendment of the articles of association. Decisions falling under the EGM include in particular:

Amendment of the corporate purpose or company name;
Capital increase: by cash contributions, contributions in kind or incorporation of reserves;
Capital reduction: to absorb losses or reimburse members;
Conversion 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.

Notice of the general meeting

Who convenes the GM?

The convening of the general meeting falls in principle to the manager of the company (Art. 71 of Loi 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:

Members representing at least 25% of the share capital: they may request the manager to convene a GM. In the event of the manager’s refusal or silence within 15 days, these members may apply to the competent court;
The commercial court: upon application by any member, the court may appoint an agent charged with convening the meeting, in cases of urgency or deadlock.

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

Form and notice period

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

Form: registered letter with acknowledgment of receipt sent to each member. The articles of association may provide for other methods of notice (email, hand delivery against receipt), provided that each member has expressly accepted the principle;
Notice period: the 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 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 notice (the manager, or the members/court in case of failure). It determines the matters on which the members are called to deliberate.

Important rule: members cannot vote on resolutions on matters not on the agenda. Any decision taken outside the agenda is void. However, members may ask the manager to add items to the agenda, provided this request is made before the notice is sent.

Quorum and majorities

OGM: quorum and majority

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

First notice: quorum of 50% of ownership interests. Decisions are taken by a majority of 50% + 1 of the interests represented;
Second notice (in case of failure to reach quorum): no quorum is required. Decisions are taken by a majority of 50% + 1 of the interests represented, regardless of the number of interests present or represented.

EGM: enhanced majority

Article 75 of Loi 5-96 imposes an enhanced 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 favourable votes represent 75% of the total capital of the company, not 75% of interests present;
Exception: changing the company’s nationality and increasing members’ commitments require the unanimity of the members.

Voting

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

A member may be represented by another member or by their spouse, unless the articles of association provide otherwise. Representation by a non-member third party is not authorized, unless the articles of association provide otherwise.

Written consultation: alternative to a physical meeting

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

Conditions for written consultation

The articles of association must authorize this method of decision-making;
The manager sends each member the text of the proposed resolutions, accompanied by the documents necessary for the members’ information;
Each member has 15 days from receipt of the documents to submit their vote (approval or rejection);
Failure to respond within the period is deemed rejection of the resolution.

Limitations of written consultation

Written consultation cannot be used for:

The annual approval of accounts: this decision mandatorily requires the holding of a meeting (Art. 70);
The dismissal of the manager: this decision requires a contradictory debate.

Minutes of the general meeting

Obligation to prepare minutes

Every general meeting, whether ordinary or extraordinary, must give rise to the preparation of minutes. This document constitutes proof of the decisions taken and binds the company vis-a-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 notice and compliance with the legal period;
The agenda as it appeared in the notice;
The list of members present or represented, with indication of the number of interests 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 discussions and significant contributions.

Formalities

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

Members’ rights

Right to prior information

Article 70 of Loi 5-96 guarantees members an enhanced right to information before any general meeting. The manager must communicate to the members, 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

Members have the right to ask the manager written questions, to which the manager is required to respond during the meeting. These questions must be addressed to the manager within a reasonable period before the date of the meeting.

Right to request a management audit

Any member holding at least 10% of the share capital may apply to the court for the appointment of an expert to prepare a report on one or more management operations. This right constitutes a protection mechanism for minority members.

Professional assistance from a chartered accountant is essential to ensure the proper conduct of SARL general meetings. At Upsilon Consulting, our chartered accountancy firm in Casablanca assists managers in preparing the annual accounts, drafting minutes and complying with legal obligations.

Frequently asked questions

Can an absent member vote at a SARL general meeting?

Yes, an absent member may be represented by another member or by their spouse, by giving them a written proxy. Written consultation (Art. 71-1) also constitutes an alternative when provided for by the articles of association. However, voting by correspondence is not expressly provided for by Loi 5-96, unless the articles of association 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 period. At this second notice, no quorum is required: decisions are taken by a majority of 50% + 1 of the interests represented, regardless of the number of interests present. For the EGM, the 75% majority of total capital remains required in all cases.

Must the minutes of the general meeting 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 articles of association (change of manager, capital increase, amendment of corporate purpose, etc.), the manager must proceed with an amended registration in the trade register and file the updated articles of association. The minutes then serve as a supporting document with the registry.

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This article is written by the team of chartered accountants at Upsilon Consulting, a firm registered with the Order of Chartered Accountants (OEC) of Morocco.

Need assistance with the legal management of your SARL? Contact Upsilon Consulting for tailored advice.

SARL General Meeting in Morocco: Notice, Quorum and Minutes | Upsilon Consulting