Here we all are in the annual general meeting: what do we actually decide, and what comes after?

1. 1. Who must hold an approval meeting, and by what date?

Every commercial company. No exemption for size, none for legal form. The question usually arrives in a different shape: "I am the sole shareholder of my EURL, do I really need a meeting?" The code says yes, and only changes the name of the act.

For a year ending 31 December, the cut-off is 30 June. Nothing requires waiting until June. Once the balance sheet is closed, the meeting can be held. Held in March, it is prepared calmly. Held in June, it is endured.

An extension exists, but only through the courts. Article 676 reserves it for the SPA, on application by the board of directors or the management board, by an order that cannot be appealed. Article 802 mentions the same possibility for the SARL, capped at a further six months. In both cases the application is made before the deadline expires. Afterwards there is no extension left to request, only an offence already committed.

One clarification that prevents a common scheduling error. The annual tax return and the approval of accounts are different obligations, before different authorities, with different deadlines. The first is filed with the tax administration under the fiscal calendar. The second belongs to the commercial code. Filing a tax return exempts no company from a meeting, and holding a meeting settles no return.

2. 2. What must be sent to shareholders, and how many days before?

This is where a properly held meeting becomes voidable. Article 584 puts it in one line: any resolution passed in breach of that paragraph may be annulled. A meeting can gather everyone, vote unanimously and produce flawless minutes, then fall because the documents went out late.

In a SARL, article 580 sets notice at not less than fifteen days before the meeting, by registered letter stating the agenda. Article 585(3) gives each shareholder, during those same fifteen days, the right to inspect and copy the proposed resolutions, the management report and, where applicable, the auditor's report.

In an SPA, the timetable is longer and stricter. Thirty days before the meeting, the board makes the documents listed in article 678 available to shareholders. Fifteen days before, any shareholder may request them (art. 680). And article 817 punishes with a fine of DZD 20,000 to 100,000 the chairman who failed to notify shareholders of the meeting date by registered letter at least thirty-five days beforehand.

The documents that must circulate

• The balance sheet, income statement and financial statements for the year;
• The inventory — kept available at the registered office, not sent out;
• The management report on the year's operations;
• The text of the resolutions put to the vote;
• The statutory auditor's report, where one exists;
• In an SPA, the auditor's special report on regulated agreements (art. 628).

A statutory auditor is mandatory in a SARL or EURL only above thresholds: share capital above DZD 1,000,000, or net turnover above DZD 5,000,000, or more than ten permanent employees. Crossing one threshold is enough. Every SPA is covered without condition. The mandate runs three financial years in a SARL, six in an SPA.

Failing to send these documents on time is an offence in itself: article 801(2) fines the manager DZD 20,000 to 200,000, whether or not the meeting was eventually held.

3. 3. How much can you actually distribute after a profitable year?

Almost never the net result. This is the most misunderstood gap between a line on the balance sheet and money leaving the account. Three provisions build the calculation, and they are read in order.

Article 720 first defines net profit: the net income of the year less overheads and other charges, including all depreciation and provisions. Article 718 adds that these are booked "even where profits are absent or insufficient". A result inflated by an omitted charge is not a distributable result; it is an inaccurate balance sheet.

Article 721 then imposes the legal reserve: at least one twentieth of the year's net profit, reduced where applicable by prior losses. The transfer ceases to be compulsory once the reserve reaches one tenth of share capital. The sanction is civil and absolute — any resolution to the contrary is void.

Article 722 closes the calculation. Distributable profit is the net profit for the year, increased by retained earnings brought forward, reduced by the article 721 transfer, by the employees' share of profits, and by prior losses.

The DZD 40,000 transfer deserves an explanation, because the arithmetic surprises people. This company has capital of DZD 1,000,000 and a legal reserve already standing at DZD 60,000. The article 721 ceiling is one tenth of capital, so DZD 100,000. Five per cent of DZD 4,000,000 would be DZD 200,000, but the transfer stops at the ceiling: only DZD 40,000 remains to be booked. Next year the line disappears. These figures illustrate the method; they are not a real case.

What the dividend then costs is a separate question, settled long before the meeting when the remuneration channel is chosen. We covered it in taking money out of your Algerian company.

4. 4. When must dividends be paid, and what does an irregular distribution cost?

Nine months after the financial year end, at the latest. Article 724 is precise: the meeting sets the payment terms, failing which the manager or the board does, but payment "must take place within a maximum period of nine months after the close of the financial year". An extension again requires a court decision.

The clock runs from the year end, not from the meeting. For a year ending 31 December, the money must be paid by 30 September. A meeting held on 30 June therefore leaves three months, not nine.

The operative word is "fictitious". Article 723 defines it without ambiguity: after approval of the accounts and confirmation that distributable sums exist, the meeting determines the shareholders' share; any dividend distributed in breach of those rules is a fictitious dividend. Distributing before approving, or beyond the article 722 ceiling, moves the transaction into that category.

The asymmetry between the two forms is not the one usually assumed. The director faces criminal liability either way, under article 800(2) in a SARL and article 811(1) in an SPA, with the same penalty. The difference sits with whoever banked the money: in a SARL, article 588 allows recovery from the shareholders who received it; in an SPA, article 726 forbids recovery outside the cases of articles 724 and 725. The shareholder keeps, the SARL member repays.

In the practice we observe, irregular distributions rarely start with an intention to defraud. They start with a shareholder current account overdrawn during the year, tidied up afterwards by a distribution voted to cover withdrawals already made. The transaction happened before the meeting sat; the minutes merely dress it.

5. 5. What must the minutes contain, and where are they kept?

The code says less than expected about content and more than expected about existence. Article 583 runs to two sentences: the shareholders' meeting is chaired by the manager; every resolution of the shareholders' meeting is recorded in minutes. No prescribed template, no list of mandatory particulars. But no deliberation without a written record.

In an SPA, article 681 adds the attendance sheet, with the surname, usual first name and address of each shareholder present and the number of shares held, proxies annexed, and certification by the officers of the meeting.

The four decisions of an approval meeting

The majority in a SARL is that of article 582: more than half of the share capital. If it is not reached on first consultation, and unless the articles provide otherwise, shareholders are consulted a second time and decisions are taken by a majority of the votes cast, whatever share of capital is represented. In an SPA, article 675 requires a quarter of the voting shares on first call; on second call, no quorum applies.

6. 6. An ordinary SARL meeting, run from start to finish

The rules are now on the table. What remains is to see them work together on a complete case, from the last day of the financial year to the vote on the final resolution. The company below is fictional. The figures are chosen so that every rule set out above is triggered at least once.

The timetable actually followed

One remark on the first line of that table. The manager closed the accounts on 18 April, leaving the auditor five weeks before the meeting. Closing them on 25 May would have met the six-month deadline and made the audit undeliverable.

The day of the meeting

The meeting is chaired by the manager, shareholder A, as article 583 requires. The attendance sheet is signed at the opening.

The code sets no quorum for a SARL meeting. What counts is the article 582 majority: more than half of the share capital, not a majority of the shareholders present. Three people, but a thousand votes.

The appropriation put to the vote

The check worth keeping to one line is the one on the last row: the appropriations must sum to the result for the year plus the earnings brought forward, not to the result alone. It is the most frequent arithmetic error in the minutes we review.

The resolutions and how they went

The minutes are signed in the room, then entered in the register held at the registered office. They carry what article 583 makes necessary through its bare requirement of a written record: the date, the place, the shareholders present and their shares, the text of each resolution, and the numerical outcome of each vote. Shareholder C's dissent is recorded. That is precisely what protects the company if the distribution is challenged later.

Three steps remain after the meeting, and they are what closes the chain: file with the CNRC before 26 June, pay the dividends on the dates voted, and store the filing receipt with the 2025 accounts.

7. 7. Filing with the CNRC: one month, two languages, DZD 30,000 to 300,000

This is where the chain breaks most often, because the step comes after the decision and looks like paperwork. It is not. Article 717(3) puts it in a sentence worth reading closely: the annual accounts "shall be filed with the National Commercial Register Centre within the month following their adoption by the general meeting. Such filing constitutes publication".

Two consequences live in those words. The month runs from adoption by the meeting, not from the financial year end: a meeting held on 15 March opens a period expiring on 15 April, not on 31 July. And filing constitutes publication: what is filed becomes enforceable against third parties and open to inspection. Algerian company accounts are not confidential.

The filing pack

The bilingual requirement catches out companies that keep one set of accounting documents. It is prepared in advance, not at the counter. Filing takes place at the local CNRC office of the wilaya where the registered office sits, and the fees are set by ministerial order.

All commercial companies are covered: SPA, SARL, EURL, SNC and SCS. Banks and financial institutions follow a separate regime, with six months from the year end and a 30 June cut-off.

One field observation explains much of the lateness. Many directors date their meeting 30 June out of habit, then file in September assuming the summer is theirs. The one-month period expired on 30 July. Backdating the minutes to close the gap makes things worse rather than better: the false document then circulates through every one of the company's files.

8. 8. What does a director who skips the meeting actually risk?

Imprisonment. The word is harsh, and it is in the text. Article 802 of the commercial code punishes with one to three months' imprisonment and a fine of DZD 20,000 to 200,000, or one of those penalties only, managers who have not convened the shareholders' meeting within six months of the year end, or who have not submitted the article 801(1) documents for its approval.

Two points in the drafting deserve attention. The penalty targets the manager as an individual, not the company. And the offence is made out by the absence of a meeting within the period, with no need to show intent to harm: provisions that require bad faith say so expressly, and this one does not.

A civil consequence follows, and it is sometimes heavier than the fine. Article 580 allows one or more shareholders representing at least a quarter of the share capital to demand that a meeting be held, any contrary clause being deemed unwritten. And any shareholder may apply to court for the appointment of an agent to convene the meeting and set its agenda. A manager who does not gather his shareholders is not buying time. He is opening a courtroom door for them. The full scope of his annual duties is set out in our guide The SARL manager: powers, duties, liability.

One last chain, the chain of losses. When equity deteriorates, the approval meeting starts the clock. Article 589 requires the shareholders to be consulted where three quarters of the share capital has been lost. Article 803 then punishes with one to three months' imprisonment and a fine of DZD 20,000 to 100,000 the manager who, net assets having fallen below a quarter of capital, failed to consult the shareholders within four months of approving the accounts that showed those losses. Skipping the approval does not suspend that period. It only adds one offence to another.

9. 9. The full timetable for a year ending 31 December

Six operations, three statutory deadlines, and an order that is not negotiable. The dates below apply to a company whose financial year ends on 31 December; for a different year end, only the starting points move.

One reading of this table comes before all others. If the meeting is held on 30 June, filing falls due on 30 July and dividends on 30 September: three deadlines collide inside three months, at the point in the year when firms and registry counters are busiest. A meeting held in March spreads the same obligations over six.

Three checks, finally, that cost little and prevent most of the irregularities we encounter. Does the minute register contain one resolution per financial year, with no gap? Do the appropriations voted sum to the result for the year plus the earnings brought forward? Is the CNRC filing receipt stored with the accounts it belongs to? A company that answers yes three times has nothing to fear from an audit on this ground.

FAQ — Frequently asked questions

BENSAID Farouk

Financial & Economic Research Consultant — ProfitPilot NextGen Consulting

Certified sole trader and expert in financial studies, risk analysis and market research for SMEs, startups and investors in Algeria. View full profile