How to deal with general meetings and deliberations of a collegial governing body in times of Corona?
Many companies have their annual general meeting scheduled in the upcoming days/weeks. However, large meetings are still to be avoided which means that general meetings and deliberations of governing bodies are also compromised. Therefore, the federal government has elaborated a temporarily exception rule.
The Belgian royal decree N. 4 of 9 April 2020 offers a number of options for general meetings or deliberations of a collegial body due in the period from 1 March 2020 till and including 30 June 2020. This royal decree applies to all general meetings and deliberations of a collegial body which are supposed to be held during aforementioned period as well as to general meetings and deliberations of collegial governing bodies convened before 30 June 2020, but where the meeting is held after 30 June 2020. The options offered by the royal decree are more extended than what is possible in accordance with the Belgian Code of Companies and Associations. Please note that the governing body is not obliged to apply the royal decree, it merely regards optional measures.
Remote general meeting
The company’s governing body can choose to hold a remote general meeting, even if only partially.
a. Voting form
In this case, the shareholder will have the possibility to vote before the general meeting is held, by means of a voting form. This voting form is put at disposal by the governing body or through the company’s website. The Belgian Code of Companies and Associations also allows voting by means of a voting form, but only when this was entered in the articles of association. The governing body can now decide to use a voting form, without a statutory authorization being required, and even when the articles of association prohibit it. However, even in the event of distance voting by means of a voting form, a physical general meeting must be held at which the governing body and if necessary the statutory auditor are present (see the options below in c).
b. Binding voting instruction (“proxy”)
The shareholder also has the opportunity to give a proxy to a person appointed by the governing body, whereby a binding voting instruction is given. This principle is already included in the Belgian Code of Companies and Associations, but can now also be used without statutory authorization and even when the articles of association prohibit it. Also in this case, a physical general meeting will be necessary in presence of the proxy holder (however, see the option below in c).
c. Video conference
The governing body can choose to hold the general meeting by means of a video or phone conference. In that event, the members of the governing body, the statutory auditor and the proxy holder will not need to attend the meeting physically. They can also remotely participate in the meeting. In such case it will be a full general meeting at a distance, with everything taking place “virtually”.
The shareholders’ right to ask questions is regulated so that the questions are either asked in writing, with them being answered at the latest on the day of the general meeting, but still before the voting begins, or orally during the meeting itself, provided that the meeting is transmitted directly or indirectly by means of a phone or video conference.
d. Written decision-making procedure
Furthermore, the royal decree does not change the written decision-making procedure of the general meeting. This can always be done with the shareholders acting unanimously, unless it concerns decisions that must be drawn up and certified in due legal form, or when the articles of associations excluded this option.
Postponement of the general meeting
Said royal decree also provides in the option to postpone the general meeting. Nevertheless, postponement is not possible within the frame of the capital impairment procedure (“alarmbelprocedure” in Dutch) or when the general meeting was convened upon specific request of at least 10% of the shareholders or the statutory auditor.
It is legally obliged to hold a general meeting at the latest 6 months after the closing of the fiscal year. This term was extended by 10 weeks for companies whereof the end of the above-mentioned term of 6 months is between March 1st and June 30th. For instance: for companies closing the fiscal year on December 31st , the general meeting must normally be held before June 30th . Because of the 10 weeks’ extension, the new date will be September 8th . Also the term for the filing of the annual accounts is extended mutatis mutandis.
What about collegial governing bodies?
Compared to the general meeting of shareholders, the deliberations by collegial governing bodies are less restrictive in the Belgian Code of Companies and Associations. Even though not expressly included in the Belgian Code of Companies and Associations, it is generally accepted that deliberations by a collegial governing body can be done by means of a video or phone conference, provided that minutes of the deliberations are drafted. The royal decree now explicitly allows that these deliberations can be done by means of a phone or video conference .
Under the Belgian Code of Companies and Associations the governing body can also make written decisions save unanimous agreement. The royal decree confirms this option, even if it was excluded by the articles of association.
Conclusion
If you wish to hold a general meeting in these times of corona, it can be organized remotely. The royal decree’s stipulations provide in a more flexible arrangement than what is provided under the Belgian Code of Companies and Associations. Basically, many principles described in the above-mentioned code, can be applied without statutory authorization.
You can also choose to postpone the annual general meeting up to 10 weeks after the legally allowed term. Furthermore, collegial governing bodies will be able to make decisions in phone or video conferences, or by means of unanimous decisions.
Please feel free to contact us should you have further questions.
Sara Burm and Olivier De Witte
De Langhe Attorneys
