Let’s get digital – A practical view


Let’s get digital – A practical view: COVID – 19 Crisis versus general meeting

Physical meetings have become impossible in light of COVID-19 Crisis and the measures imposed by the government.

In this context, an authorization decision regarding the organization of companies’ general meeting was submitted to the government, temporarily implementing a number of alleviating measures, intended to enable companies to convene their ordinary general meetings in accordance with the mandatory rules put in place to combat the COVID-19 virus, insofar as these meetings have been convened or must be convened prior to 19 April 2020.

1. On the scheduled date, in writing or via digital means

The shareholders can always take unanimous and written decisions that fall within the competence of the general meeting, with the exceptions of the decisions which must be taken by authentic instrument (i.e. a notarial deed). This existing possibility already enables meetings that do not require a physical presence, thereby complying with the measures imposed in light of the COVID-19 crisis.

If the shareholders wish to deliberate verbally (instead of making use of the possibility of written decision-making), the general meeting can be held via digital means. This option does not need to be explicitly included in the articles of association of the company concerned. Every company can organize their general meeting digitally, regardless of whether this option is included in the articles of association.

In the latter case, the shareholders can either pose their questions by communicating them to the company in advance or via the selected electronic means of communication. If voting is done by proxy, a person appointed by the administrative body can act as proxy holder, regardless of whether or not the articles of association provide for a restriction on the basis of which a shareholder can only be represented by another shareholder.

If an authentic instrument (i.e. a notarial deed) is required, it is sufficient for one member of the administrative body or a person appointed by the administrative body to physically meet with the notary, meaning the other members of the general meeting can participate via an electronic means of communication.

2. Postponement

The proxy decision also includes the possibility to postpone the annual general meeting (pertaining to the annual accounts) for a maximum of 10 weeks following the latest date on which the meeting should have taken place in normal circumstances.

This option can also be applied by companies that have already convened the general meeting, provided that the shareholders and members are correctly informed about this.

3. Conclusion

The COVID-19 crisis does not pose a major obstacle to companies’ general meetings. In addition to the existing possibility of written deliberations and decisions, each company can hold its general meeting digitally. Regarding the possibility of a 10-week extension, the question arises whether this delay will be sufficient to bridge the COVID-19 crisis. Furthermore, such postponement could also send a negative signal to the company’s customers and suppliers, leading us to the conclusion that written resolutions or the digital meeting are preferable.

It is also advisable to kill two birds with one stone by including the measures related to the continuity of the company (liquidation test, alarm-bell procedure, …) in the minutes of the board of directors pertaining to the approval of the annual report to avoid directors’ liability.

If you have any questions regarding the practical application of these options, you can always contact your regular contact person at Quorum or send an e-mail to info@quorumlaw.eu.