Risks of losing voting rights when shareholders do not attend shareholders’ meetings

The General Meeting of Shareholders is a pivotal forum for setting a company’s strategic direction; however, empty seats caused by absent shareholders are far from uncommon. Does shareholders’ non-attendance at shareholders’ meetings undermine the collective decision-making process? Could it even invalidate the meeting altogether? Together with NPLaw, the following article examines the legal issues of such a situation, including affected rights and interests as well as effective solutions to ensure that corporate decisions remain robust and legally valid.

I. Practical realities concerning shareholders’ non-attendance at shareholders’ meetings

In joint-stock companies, shareholders’ non-attendance at shareholders’ meetings is a fairly common occurrence. Although the General Meeting of Shareholders is the highest decision-making body, empowered to decide core matters such as development strategies, amendments to the charter, and the election of members of the Board of Directors and the Supervisory Board, convening a quorum of shareholders often proves challenging.

This reality arises from various causes: Some minority shareholders may show little interest in corporate governance and focus solely on dividend returns; others may be constrained by time or geographical distance; and in certain cases, shareholders deliberately stay away to obstruct the adoption of corporate resolutions, particularly during power struggles or when resolutions require high approval thresholds.

Shareholders’ non-attendance not only makes it difficult to satisfy quorum requirements, leading to repeated meetings and increased time and costs, but may also delay strategic decisions, adversely affecting business operations and the company’s development.

Accordingly, a sound understanding of the relevant legal framework and the adoption of appropriate response measures are essential for every joint-stock company.

II. Concept of shareholders’ non-attendance at shareholders’ meetings

To safeguard their rights and interests, shareholders must understand the basic concepts. This section clarifies what constitutes shareholders’ non-attendance and the related legal issues.

1. What does “shareholders’ non-attendance at shareholders’ meetings” mean?

Shareholders’ non-attendance refers to circumstances where one or more shareholders, despite having received valid notice of the General Meeting of Shareholders, for any reason do not attend the meeting in person or fail to exercise their voting rights through other lawful means (such as authorization by proxy or remote voting).

In essence, it is merely the absence of shareholders from the company’s most important corporate forum, which may affect the procedural validity of corporate resolutions.

2. What are the possible causes of shareholders’ non-attendance?

In practice, shareholders’ non-attendance may arise from various causes, including:

• Lack of interest or time constraints: Many minority shareholders, particularly those not inclined to engage in governance, pay little attention to general meetings. Personal commitments or the perception that meeting outcomes have limited impact on their interests may deter attendance.
• Geographical distance: Where shareholders are dispersed across different locations, attending in person may be costly or impracticable.
• Strategic abstention: In some cases, shareholder groups intentionally refuse meetings to prevent the quorum from being met, thereby obstructing the passage of undesired resolutions. It is commonly seen in internal power struggles.
• Insufficient or unclear information: Although the company has a duty to notify, notices may be misdelivered, or shareholders may fail to appreciate the significance of the meeting.
• Dissatisfaction or opposition: Shareholders may abstain as an implicit expression of dissatisfaction with management or opposition to proposals on the agenda.

Thus, the causes of non-attendance are diverse, ranging from objective constraints to strategic calculations.

3. Does shareholders’ non-attendance change their role in the company?

Pursuant to Article 114 of the Law on Enterprise 2020, as amended in 2025, shareholders are entitled to attend and speak at the General Meeting of Shareholders and to vote. Non-attendance merely constitutes a non-exercise of these rights and does not affect shareholder status.

Accordingly, non-attendance does not alter shareholders’ fundamental role in the company. Shareholders remain owners of shares and continue to enjoy the rights and take the obligations attached to such a status.

However, absence from the General Meeting of Shareholders may affect the exercise of rights and indirectly diminish shareholders’ influence:

• Loss of direct voting opportunity: By not attending, shareholders remove the opportunity to vote on material corporate matters.
• Loss of direct access to information: Shareholders miss out on management reports, discussions, and the opportunity to raise questions.
• Diminished influence: Repeated absence may reduce a shareholder’s practical influence on corporate decisions, particularly in the case of significant shareholders with potential controlling power.

In short, while non-attendance does not deprive shareholders of ownership status, it effectively results in removing the ability to directly influence the company’s governance at the relevant time.

III. Legal provisions relating to shareholders’ non-attendance at shareholders’ meetings

Enterprise law provides detailed rules to safeguard both the validity of meetings and shareholders’ rights. This section examines the relevant statutory provisions governing shareholders’ non-attendance.

1. What are the statutory quorum requirements for a valid General Meeting of Shareholders?

The minimum attendance thresholds for the General Meeting of Shareholders are clearly prescribed under the Law on Enterprise 2020, as amended in 2025:

• First meeting: The meeting may proceed when attending shareholders represent more than 50% of the total voting shares, with the specific ratio stipulated in the company charter pursuant to Clause 1, Article 145.
• Second meeting: If the first meeting fails to meet quorum requirements, a second meeting may be convened and may proceed when attending shareholders represent at least 33% of the total voting shares, as provided in Clause 2, Article 145 and as specified in the company charter.
• Third meeting: If the second meeting still fails to meet quorum requirements, a third meeting may be convened and shall proceed regardless of the number of attending shareholders and the total voting shares represented, pursuant to Clause 3, Article 145.

These quorum rules ensure that resolutions of the General Meeting of Shareholders remain representative and legally valid even when many shareholders do not attend.

2. How does current law regulate shareholders’ rights and obligations to attend meetings?

Current law clearly provides for shareholders’ rights and (indirect) obligations in relation to meeting attendance, applicable to both ordinary shareholders and holders of voting preference shares:

Rights to attend and vote:

• Ordinary shareholders are entitled to attend and express opinions at the General Meeting of Shareholders and to exercise voting rights in person, by proxy, or by other methods prescribed in the company charter. Each ordinary share carries one vote (Point (a), Clause 1, Article 115).
• Holders of voting preference shares have a greater number of votes per share (as stipulated in the company charter) and enjoy rights similar to those of ordinary shareholders, except that such shares are non-transferable (Article 116).

Indirect obligations to attend:

• While the law does not impose a direct obligation on shareholders to attend meetings, Clauses 3 and 4, Article 119 require shareholders to comply with the company charter and internal governance regulations and to observe resolutions and decisions of the General Meeting of Shareholders and the Board of Directors. Accordingly, where the charter or internal rules impose attendance-related requirements, shareholders must comply.
• Moreover, attending meetings is a direct means for shareholders to fulfill their responsibility to protect their own lawful rights and interests as well as those of the company through voting mechanisms.

Thus, the law regulates broad participatory rights while establishing indirect obligations to ensure orderly corporate governance. 

3. Does non-attendance restrict shareholders’ other statutory rights?

Shareholders’ non-attendance at the General Meeting of Shareholders does not restrict or deprive them of other core rights. Under enterprise law, attendance is a right rather than a mandatory obligation.

Pursuant to Article 115 of the Law on Enterprise 2020, as amended in 2025, shareholders who are absent continue to enjoy the following rights:

• Property rights: The right to receive dividends as decided by the General Meeting of Shareholders and to receive residual assets in proportion to shareholding upon dissolution or bankruptcy.
• Disposition rights: The right to freely transfer shares, except in cases restricted by law or the company charter.
• Information rights: The right to access and extract information on the list of voting shareholders, request correction of inaccurate personal information, and inspect or copy the company charter, minutes of the General Meeting of Shareholders, and resolutions adopted thereby.

Notably, the law establishes protective mechanisms for absent shareholders to prevent the imposition of unlawful resolutions. Pursuant to Article 151 of the Law on Enterprise 2020, as amended in 2025, within 90 days from receipt of the meeting minutes, shareholders who did not attend (or were absent for legitimate reasons) retain the right to request a court or arbitral tribunal to annul resolutions of the General Meeting of Shareholders where the meeting procedures or the content of the resolutions seriously violate the law or the company charter.

In summary, absent shareholders merely forgo the opportunity to vote at the meeting, while their property, information, and litigation rights remain fully protected by law.

4. In what circumstances may a meeting be postponed due to attendance-related issues?

Shareholders who do not attend meetings do not have the unilateral right to request postponement. Postponement is strictly regulated to ensure stability and continuity of corporate governance.

Pursuant to Clause 8, Article 146 of the Law on Enterprise 2020, as amended in 2025, the chairperson may postpone a duly registered meeting for a maximum of three working days from the scheduled opening date, and may only postpone or change the meeting venue in the following circumstances:

• The venue does not have sufficient seating capacity for all attendees;
• The information and communication facilities at the venue are inadequate to enable shareholders to participate, discuss, and vote;
• There are disruptive acts that may hảrm the fair and lawful conduct of the meeting.

IV. Questions regarding shareholders’ non-attendance at shareholders’ meetings

Shareholders’ non-attendance often leads to practical questions concerning rights and obligations. Below are common issues encountered in such situations.

1. Are absent shareholders entitled to receive notice of meeting results?

Pursuant to Clause 5, Article 150 of the Law on Enterprise 2020, as amended in 2025, minutes of the General Meeting of Shareholders must be sent to all shareholders within 15 days from the end of the meeting; the report on vote counting may be substituted by publication on the company’s website.

Accordingly, absent shareholders remain entitled to be informed of meeting outcomes as part of their statutory right of access to information.

2. May shareholders exercise voting rights by other means if they do not attend in person?

Shareholders who are not physically present may still exercise voting rights through legally recognized flexible mechanisms:

First, shareholders may authorize an individual or organization to attend and vote on their behalf. Pursuant to Point (a), Clause 1, Article 115 and Article 144 of the Law on Enterprise 2020, as amended in 2025, such authorization must be made in writing, and the proxy shall exercise the shareholder’s rights within the authorized scope.

Second, shareholders may vote remotely without appointing a proxy. Pursuant to Clause 3, Article 144, shareholders are deemed to have attended and voted if they vote through the following methods:

• Submission of written ballots: By post, fax, or email sent to the company prior to the opening of the meeting.
• Online voting: Participation and voting via electronic systems or online meeting platforms provided by the company, subject to the company charter and technical safeguards.

Thus, even in the absence of physical attendance, shareholders retain multiple lawful options to protect their interests.

3. May shareholders authorize others to attend on their behalf?

Pursuant to Clauses 1 and 2, Article 144 of the Law on Enterprise 2020, as amended in 2025, shareholders who cannot attend the General Meeting of Shareholders may authorize an individual or organization to attend and vote on their behalf.

The authorization must be made in writing in accordance with civil law requirements and must specify the proxy’s name and the number of shares represented. The proxy is not required to be a shareholder of the company. Upon attendance, the proxy must present a valid authorization letter to register as a delegate, thereby safeguarding the absent shareholder’s rights and voice.

4. May absent shareholders request annulment of adopted resolutions?

Absent shareholders may request annulment of adopted resolutions where statutory conditions are satisfied. Shareholders or groups of shareholders holding at least 5% of the total ordinary shares (or a lower threshold prescribed in the company charter) are entitled to request a court or arbitral tribunal to annul resolutions of the General Meeting of Shareholders.

Pursuant to Article 151 of the Law on Enterprise 2020, as amended in 2025, such requests are admissible where:

• The procedures for convening the meeting and adopting resolutions seriously violate the law or the company charter; or
• The content of the resolutions violates the law or the company charter.

The petition must be filed within 90 days from receipt of the resolution. Even if absent, shareholders retain legal remedies against unlawfully adopted resolutions.

5. Does non-attendance restrict shareholders’ right to transfer shares?

Non-attendance does not restrict shareholders’ right to transfer their shares. As noted above, the right to attend meetings and the right to transfer shares are independent. A shareholder’s failure to attend meetings does not constitute a legal basis for restricting share transfer, unless the shares are subject to statutory or charter-based transfer restrictions duly stated on the share certificates.

Accordingly, shareholders remain free to transfer their shares even if they have never attended any shareholders’ meeting.

V. Why seek legal counsel from NPLaw when issues arise from shareholders’ non-attendance?

Proper compliance with rules on convening and participating in the General Meeting of Shareholders not only ensures smooth corporate governance but also protects the lawful rights and interests of all shareholders. However, where shareholders’ non-attendance impedes decision-making, or where you are an absent shareholder seeking to safeguard your rights, self-navigating these issues can be challenging.

If you encounter difficulties in convening meetings, ensuring quorum, resolving issues arising from absent shareholders, or if you are a shareholder seeking legal advice on your rights, please contact NPLaw for timely support.

The above information is for reference purposes only. For case-specific advice, please contact Ngoc Phu Law LLC for consultation.