In its Judgment File No. 27 Cdo 2645/2018, dated 29 May 2019, the Czech Supreme Court commented on the consequences when a transaction carried out by a limited liability company is not approved at the general meeting.
If the law requires that a legal transaction should be approved at a general meeting of a limited liability company, the absence of such approval results in relative invalidity of the transaction (Section 48 BCA), which may be asserted by both the company and its shareholders (both being entities that should be protected by the requirement of general meeting approval). The assertion, in this respect, means an objection to the transaction done under Section 586 CC by one party addressed to the other party (or to all contractual parties if the person raising the objection is not a party to the agreement).
If the general meeting derives the power to approve a legal transaction (merely) from the Memorandum of Association, such violation of the Memorandum (meaning the missing approval by a general meeting) does not affect the validity of the concerned legal transactions, i.e., transactions, whereby directors carry out (strategic) decisions (exceeding management duties) without the approval foreseen by the Memorandum (Section 47 BCA). Normally, however, such course of action on the part of directors constitutes a breach of the duty to act with due care.