What Is a 341 Meeting?

The term “341 meeting” refers to a meeting between creditors and debtors that is required to take place during the course of a Chapter 7 bankruptcy proceeding. Accordingly, its name is derived from section 341 of the bankruptcy code.

A 341 meeting is typically scheduled roughly one month after a debtor files for bankruptcy. To be considered legally valid, the meeting must include both the individual filing for bankruptcy and the court-appointed bankruptcy trustee.

How 341 Meetings Work

The 341 meeting is one of many stages involved in declaring bankruptcy in the United States. Its primary purpose is to establish the facts of the bankruptcy in question, and to ensure that all the paperwork necessary to carry out the bankruptcy proceedings are in order. Although the attorneys of the debtor and creditor are welcome to attend, the only parties whose presence at the 341 meeting is legally required are the debtor in question and the court-appointed trustee.

Prior to the 341 meeting, the trustee would have already reviewed the bankruptcy paperwork and financial records submitted by the debtor. The purpose of the 341 meeting, therefore, is principally for the trustee to confirm the facts stated by the debtor and to collect any additional paperwork that may be required. In the event that the debtor is attempting bankruptcy fraud, this would likely be detected by the trustee during or prior to the 341 meeting.

From the debtor’s perspective, the objective of the 341 meeting is to provide the necessary documents in order to prove that their identity is authentic, while also establishing their current assets, liabilities, income, expenses, and other relevant financial circumstances. If the creditors are in attendance, they will be able to ask clarifying questions, such as whether the debtor is entitled to any upcoming income sources, ie. tax rebates or inheritances, or whether the debtor owns undisclosed assets, such as shares in a private business or assets held overseas.

Real World Example of a 341 Meeting

Peter is a bankruptcy trustee currently presiding over a 341 meeting. The debtor present declared bankruptcy over a $5,000 debt, and has attended the meeting along with his bankruptcy lawyer. Likewise, the creditor and her lawyer are also present.

Peter’s first priority is to verify the identity and financial status of the debtor. Although Peter already reviewed many documents prior to the meeting, the 341 meeting provides an occasion to ask follow-up questions about the documents provided and to obtain any additional disclosures deemed necessary. In the unlikely event that the debtor were attempting bankruptcy fraud, this would also likely be detected due to discrepancies or inadequacies in the documents provided.

During the meeting, the lawyers for the debtor and creditor engaged in detailed conversation regarding the debtor’s assets, liabilities, and income sources; and were able to negotiate a general plan for the gradual repayment of the outstanding debt. As is the case with most 341 meetings, the meeting took place at Peter’s office, rather than in court before a judge.

What Is Aktiengesellschaft (AG)?

AG is an abbreviation of Aktiengesellschaft, which is a German term for a public limited company. This type of company shares are offered to the general public and traded on a public stock exchange. Shareholders’ liability is limited to their investment. The shareholders are not responsible for the company’s debts, and their assets are protected in case the company becomes insolvent. 

Understanding Aktiengesellschaft

Aktiengesellschaft is a German term made up of words meaning share and corporation. An AG is a business owned by shareholders which may be traded on a stock marketplace. Shareholders exercise power over controlling policies at regularly scheduled general meetings. The managing board decides on all operational matters, and the supervisory board carries them out.

German companies that are publicly traded are designated as such by the letters ‘AG’ after the company name. ‘AG’ is an abbreviation for the German word Aktiengesellschaft, which literally translates to ‘stock corporation’ or ‘shares corporation’ in English. AG companies trade publicly on stock exchanges with the majority of companies trading on the DAX.

Some of the largest German AG corporations include its automotive manufacturers:

Establishing an AG

Setting up an AG requires five or more members. An Aktiengesellschaft (AG) is subject to the Stock Corporation Act. This act involves share capital of approximately $56,000, with at least half paid at registration. The business owner will enlist the services of an attorney or bank in preparing documentation for registration.

The Aktiengesellschaft’s name will come from the enterprise’s purpose and contains the word Aktiengesellschaft in its title. The articles of association include the corporation’s name, registered office, share capital, each shareholder’s contribution, and details regarding the shares. A court or notary will authenticate the articles of association. 

The required capital is deposited into a banking account, and the notarized documents and signed application submitted to the Commercial Registry Office. The AG will become a legal entity within seven days if all materials are in order. The Office will issue a certificate of registration, and publish news of the establishment in the Swiss Official Gazette of Commerce.

AG Oversight

An AG has a managing board of one or more members appointed by and reporting to, the supervisory board of three or more members. An Aktiengesellschaft (AG) with a share capital of $3 million or more has two or more managing board members. An AG employing over 500 workers will have employee representatives occupying one-third of the supervisory board. If the employee number exceeds 2,000, employee representatives will fill half of the board. Also, the articles of association may limit the number of members.

Auditors check the corporation’s financial documents. Meeting three or more of the following conditions for two or more years in a row requires an ordinary company audit: the company has more than 50 full-time employees; revenues exceed $2 million, or the balance sheet exceeds $100,000.

GMbH vs. AG

GmbH is another common business extension primarily known for its use in Germany. Like most countries, Germany has two distinct classifications for companies: publicly traded and privately held. While AG refers to public companies, the acronym ‘GmbH’ is used to designate certain private entities and is written after a company’s name. The letters stand for Gesellschaft mit beschränkter Haftung which translated literally, means a ‘company with limited liability.’

What Is an Annual General Meeting (AGM)?

An annual general meeting (AGM) is a yearly gathering of a company’s interested shareholders. At an AGM, the directors of the company present an annual report containing information for shareholders about the company’s performance and strategy.

Shareholders with voting rights vote on current issues, such as appointments to the company’s board of directors, executive compensation, dividend payments, and the selection of auditors.

How an Annual General Meeting (AGM) Works

An annual general meeting, or annual shareholder meeting, is primarily held to allow shareholders to vote on both company issues and the selection of the company’s board of directors. In large companies, this meeting is typically the only time during the year when shareholders and executives interact.

The exact rules governing an AGM vary according to jurisdiction. As outlined by many states in their laws of incorporation, both public and private companies must hold AGMs, though the rules tend to be more stringent for publicly traded companies.

Public companies must file annual proxy statements, known as Form DEF 14A, with the Securities and Exchange Commission (SEC). The filing will specify the date, time, and location of the annual meeting, as well as executive compensation and any material matters of the company concerning shareholder voting and nominated directors.

Annual general meetings (AGMs) are important for the transparency they provide, the ability to include shareholders, as well as bringing management to accountability.

Qualifications for an Annual General Meeting (AGM)

The corporate bylaws that govern a company, along with its jurisdiction, memorandum, and articles of association, contain the rules governing an AGM. For example, there are provisions detailing how far in advance shareholders must be notified of where and when an AGM will be held and how to vote by proxy. In most jurisdictions, the following items, by law, must be discussed at an AGM:

• Minutes of the previous meeting: The minutes of the previous year’s AGM must be presented and approved.
• Financial statements: The company presents its annual financial statements to its shareholders for approval.
• Ratification of the director’s actions: The shareholders approve and ratify (or not) the decisions made by the board of directors over the previous year. This often includes the payment of a dividend.
• Election of the board of directors: The shareholders elect the board of directors for the upcoming year.

Additional Topics Covered at an Annual General Meeting (AGM)

If the company has not been performing well, the AGM is also when shareholders can question the board of directors and management as to why performance has been poor. The shareholders can demand satisfactory answers as well as to inquire about the strategies that management plans to implement to turn the company around.

The AGM is also when shareholders can vote on company matters other than electing the board of directors. For example, if management is contemplating a merger or an acquisition, the proposal can be presented to the shareholders and they can vote on whether or not the company should proceed.

Several other elements may be added to an AGM agenda. Often, the company’s directors and executives use an AGM as their opportunity to share their vision of the company’s future with the shareholders. For example, at the AGM for Berkshire Hathaway, Warren Buffett delivers long speeches on his views of the company and the economy as a whole.

Berkshire Hathaway’s annual gathering has become so popular that it is attended by tens of thousands of people each year, and it’s been dubbed the “Woodstock for Capitalists.”