For many companies, this is corporate housekeeping season: annual accounts are being closed, annual shareholders' meetings are to be held, etc. But how do you legally convene a shareholders' meeting in times of Corona, when international travel is restricted and a lot of people are still in lockdown?
Several national legislators have recently taken steps to help companies navigate these uncharted corporate waters by enacting ad hoc legislation extending legal deadlines for annual meetings or by extending the scope of possibilities to hold remote shareholders' meetings.
Take Belgium, for instance.
The bylaws of many Belgian companies provide for the annual shareholders' meeting to be held this month. A physical meeting is no longer a valid option for many in view of the rules on social distancing, but simply providing an electronic alternative and switching to remote voting is not in accordance with the rules of the Belgian Corporate Code if the company's articles of association do not provide for this. In practice, it is impossible for many companies to properly comply with company law rules regarding the organization of their meeting.
The Government has recognized this and has rapidly introduced the necessary flexibility via a tailored ad hoc Decree. This Decree addressed the corporate housekeeping struggles that many companies fact today by providing for alternatives, notably:
postpose the shareholders' meeting (subject to conditions and time limits)
have the meeting electronically, even if the bylaws do not provide for that option
have the meeting in writing, even if the bylaws do not provide for that option
Belgium is certainly not alone. Many other European jurisdictions have taken similar measures to help out enterprises in times of COVID19. Be sure to seek legal advice to ensure you benefit to a maximum extent from these new options, while remaining compliant with local law.
Also, taking the learnings of the present pandemic, companies may want to review their bylaws to introduce certain options like remote meetings and electronic voting going forward.