On 28 March the Government announced that it would be introducing legislation to assist companies facing difficulties in meeting statutory obligations to hold meetings and to file documentation on the Companies Register as a result of the coronavirus.
When passed the legislation will apply retrospectively from 26 March 2020 to companies, charitable incorporated organisations and mutual societies.
The legislation will allow companies to delay holding their AGMs, or hold AGMs, General Meetings and other meetings virtually, temporarily overriding any requirements in company Articles or other constitutional documents for members to be physically present. Companies should consider whether articles or other constitutional documents should be amended to allow for more flexible arrangements.
On 14 May the Financial Reporting Council (FRC) and the Department of Business Energy and Industrial Strategy (BEIS) published a Q&A giving information to assist companies planning for the coming months. The Q&A reflects Government intentions however, these are subject to Parliamentary approval.
- Notice of the AGM, which can be in electronic form, should still be given if this is required, even if the company intends to delay holding the meeting once it is permitted to do so. Shareholders should also be informed of the intention to delay.
- If the expected temporary measures are followed prior to the legislation being passed, companies must decide (in consultation with relevant advisors) whether votes taken at any meeting will be valid, notwithstanding the fact the legislation is expected to apply retrospectively.
- The measures are expected to be in place until the end of September, giving companies until then to hold their AGMs. The Government will have the ability to give further extensions if necessary.
- Members’ rights to vote are not affected even if they are not present in person. Companies are expected to make reasonable effort to provide the opportunity for the usual degree of engagement and challenge and should put in place measures to allow as many members as reasonably practicable to engage and exercise their voting rights e.g. allowing submission of questions in advance of the meeting.
- Companies will need to determine (in conjunction with relevant advisors) whether authorities granted at the previous AGM remain valid if they delay results for a period of more than 12 months between AGMs.
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