The Covid pandemic has generated quite a few additional challenges. How, for example, do you organise a general meeting with the shareholders present in a climate of social distancing? New legislation now makes it possible to arrange a general meeting electronically, even if the articles of association do not provide this option.
New legal framework
Until recently, holding a general meeting electronically was only possible providing it was specifically stipulated in the articles of association of a company, NPO or INPO (International Non-Profit Organisation). In practice, however, this was rarely the case, which made electronic meetings very tricky, especially during the pandemic in 2020.
The Act dated 20 December 2020 'pertaining to various temporary and structural provisions relating to justice within the framework of the fight against the spread of the coronavirus' consequently provided the option to organise a general meeting remotely, even if the articles of association do not provide this option.
Irrespective thereof, the general meeting can obviously still decide to incorporate the measures and modalities needed to hold a general meeting electronically into the company's articles of association.
Also, if a statutory regulation is in place, but it is stricter than the new legal regime, you may consider amending your articles of association. After all, stricter rules in the articles of association take precedence over any legal provisions.
Who decides to meet remotely?
The governing body can choose to hold the general meeting remotely. The new law has implications for the Companies and Associations Code (hereafter referred to as CAC) in that the articles relating to holding a general meeting electronically need to be amended and expanded.
Conditions for participation
Participation in an electronic general meeting is allowed providing the following conditions are met:
- The means of communication used shall enable the legal entity to verify the capacity and identity of the shareholder or member using it.
- The means of communication shall enable the shareholder or member using it to at least monitor the proceedings of the general meeting directly, simultaneously and without interruption. The shareholder must also be able to exercise their voting right on the items on the agenda to be discussed.
- The means of communication must give the shareholder or member of the meeting the right to actively participate in the deliberations and to ask questions, unless the governing body justifies when convening the meeting why the company or association does not have such electronic means of communication at its disposal. However, this exception will only apply until 30 June 2021.
Members of the governing body and the commissioner (if present) can also remotely participate in the general meeting.
Practical aspects of organising a general meeting electronically
The governing body must work out the modalities for conducting an electronic general meeting. It also determines how the capacity of participants can be checked, which conditions are mandatory to safeguard the security of the electronic communication, etc.
Convening the meeting
The manner in which the procedures that apply to a general meeting are guaranteed must be described in the notice convening the meeting.
If the company has a company website in accordance with Article 2:31 of the CAC, the procedures for those who have the right to participate in the general meeting remotely
must also be accessible via this website.
An agency will be appointed during the meeting to oversee the proceedings of the general meeting. However, these members will have to be present at the meeting in person as they will draw up and sign the Minutes of the Meeting. They shall also record any technical problems or incidents that have prevented or disrupted electronic participation or voting in the minutes. Members of the agency shall also take responsibility on behalf of the company for the correct composition of themeeting.
Choose your means of communication
There is no need for sophisticated communication tools to hold the meeting. Platforms such as Teams, Zoom and Skype are fine. If your company only has a limited number of shareholders, a meeting by phone may suffice.
There are other ways in which to hold a general meeting in a climate of social distancing. Read more about them here.
Not only a general meeting, but also the share register can be organised electronically. Discover the various benefits and possibilities here.