HOW TO ORGANIZE THE ANNUAL GENERAL SHAREHOLDERS’ MEETING ?
The coming weeks are annual meeting season for calendar-year companies. In the current environment, what are the alternatives to in-person meetings provided by the new Belgian Code on Companies and Associations (“BCCA“) ?
A first option to consider is to postpone the ordinary (annual) general shareholders’ meeting. In such case, the shareholders must be informed in due time, with a relevant explanation regarding the decision taken by the board of directors to not convene the meeting on the statutory date (breach of the Articles of association). For this breach of the Articles of association, the board could request specific discharge from the shareholders’ meeting.
Companies may also contemplate other options (as long as these options are not in contradiction with the provisions of their Articles of association and are applied pursuant to the BCCA requirements) :
- vote by proxy (the goal being to limit the number of shareholders attending the meeting). The shareholders can grant a proxy to another shareholder or a third party to attend the meeting in person and vote on his/her behalf. This possibility does not need to be provided for in the Articles of association. Even if the Articles do not expressly mention remote voting, companies could request shareholders to vote by proxy ahead of the meeting.
- remote vote prior to the shareholders’ meeting. The vote is expressed by letter (for the “SRL/ NV” and the SA / NV” ) or via the company’s website, by means of a form made available by the company (for the SA / NV”). The Articles of association must set out this possibility.
- participation to the general meeting by way of electronic means of communication made available by the company (video conferencing, web portal, …). The procedure and conditions for the use of the electronic means must be provided for in the Articles of association. In principle, the participation to the meeting by way of electronic means is solely possible for the shareholders (and not for the bureau, the directors and the statutory auditor)
- shareholders’ resolutions can also be adopted via unanimous written resolutions. The Articles of association do not need to expressly foresee this possibility. However, this process can neither be applied for shareholders’ decisions that have to be recorded in an authentic deed nor by listed companies.
The companies’ choice will of course depend on their specific situation.
WHAT ARE THE SPECIFIC COMMENTS TO CONSIDER IN THE COMPANIES’ ANNUAL REPORT ?
Depending on the specific circumstances, the current situation could qualify as a material event or as a risk or uncertainty to be mentioned in the annual report.
WHAT ABOUT THE FILING OF THE FINANCIAL STATEMENTS ?
Late filing of the financial statements can lead to penalties. However, in case the late filing is due to an event of “force majeure”, a reimbursement of these penalties can be claimed. For such purpose, the company must evidence the “force majeure” and must claim the reimbursement within 18 months after the closing date of the annual accounts. Whether the coronavirus could be considered as “force majeure” event in this respect will largely depend on the evolution of the situation.
The Belgian government is considering solutions to allow some flexibility and facilitate the organisation of general meetings of shareholders under the current circumstances. We will update this insight when such measures are adopted.