Corporate: The organisation of Board and Shareholder meetings
On 9 April 2020, Royal Decree No 4 containing various provisions on co-ownership and on companies and associations in the framework of the fight against the Covid-19 pandemic was published in the Moniteur belge/Belgisch Staatsblad. One consequence of the Covid-19 pandemic is that companies are faced with insurmountable practical difficulties in the organisation of meetings in accordance with the usual rules, without violating the mandatory rules introduced to combat the virus. The Royal Decree introduces much-needed flexibility and provides legal entities with a number of options, without losing sight of the rights of shareholders and members.
Scope of application
The measures have retroactive effect and are of limited duration, but may be extended beyond 3 May 2020 if it appears that application of the normal rules on meetings is still not possible. The exceptional measures are effective since 1 March 2020 and are applicable to legal persons that have called a meeting since 1 March 2020 or that should have called a meeting as from this date but have not yet done so. The proposed rules thus apply to (i) all meetings called or that should have been called between 1 March and 3 May, (ii) all meetings held between 9 April and 3 May, and (iii) all meetings that should have been held between 1 March and 9 April but were not held.
Voting remotely or by proxy, remote participation and the submission of questions
The provisions on distance voting, such as those found in Article 7:146 of the Code of Companies and Associations (CCA) for public limited companies, are temporarily extended to other legal entities (including companies and associations) that do not have their own legal or statutory rules on distance voting, insofar as the management body so decides.
In addition, the management body can require that proxies be granted to a specific person, provided the proxies contains specific voting instructions for all items on the agenda. In this way, the right to choose a proxy holder is restricted.
Moreover, entities can make use of electronic means of communication as referred to in Article 7:137 of the CCA, with the corresponding safeguards, even if no authorisation to this effect is provided in the articles of association. Meetings with a limited number of shareholders where everyone knows one another and can identify each other, can be held via video conference or conference call.
A legal entity may also allow questions to be submitted in writing until the fourth day before the meeting. If the entity chooses to allow shareholders or members to take part in the meeting on a live or deferred basis via video conference or conference call, it can answer questions at that time. It may also answer questions in writing, in which case it shall communicate the answers no later than the day of the meeting (before the vote). Listed companies must post the answers on their website.
Finally, the obligation for listed companies to send certain documents to registered shareholders by post is temporarily waived.
Postponement of the general meeting
Legal entities may opt to postpone their general meeting, even if it has already been called, provided the shareholders and members are correctly informed of this choice. In that case, the entity will be granted a ten-week extension for a number of statutory deadlines, such as the obligation to hold the general meeting within six months from the close of the financial year and the obligation to file the annual accounts with the NBB within seven months from the close of the financial year. A postponement is not permitted if the alarm bell procedure applies, meaning the company's net asset value is negative or will imminently become negative, or when the meeting was called at the request of 10% of the shareholders or the auditors.
The management body may, in all circumstances, take decisions unanimously in writing. The management body may also (where appropriate by a majority) deliberate and take decisions by electronic means of communication allowing for discussion.
We will of course continue to monitor the situation closely and will inform you if these measures are extended beyond 3 May 2020.
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