HOW TO HOLD A COVID-19 AGM

In response to social distance safety regulations, a proposal has been put forward for companies to hold meetings in a safe and compliant manner. The proposed measures are to last for the interim period expiring on 31 December 2020 with a provision for a potential extension of the interim period to no later than 20 June 2021. The law will also allow for general meetings - including annual and extraordinary meetings - to be held electronically "provided all those entitled to attend have a reasonable opportunity to participate".

Importantly for many firms, it will also permit those meetings to be held electronically even if a company's constitution does not allow them. Three proposed changes which will impact on general meetings are as follows.

1. A company need not hold an annual general meeting (“AGM”) within the time periods set out in the Companies Act or its constitution provided it holds its AGM by 31 December 2020 at the latest. In conjunction with this proposed amendment, the Bill dis-applies the requirement that the financial statements to be laid before the meeting are made up to a date no earlier than 9 months before the date of the AGM.
   
2. General meetings shall not be required to be held at a physical venue or venues but may be fully conducted by electronic means provided all those entitled to attend have a reasonable opportunity to participate. Instead of specifying the place of the meeting, notices for electronic general meetings must specify “the methodology for participation”. The Bill also allows for general meetings to be cancelled, for changes in venue for physical meetings and for physical meetings to be changed to e-meetings and vice versa in order to comply with public health advice and sets out the manner in which such changes must be notified.
   
3. A company’s directors may withdraw a dividend resolution or to reduce the dividend proposed to be declared by resolution at a general meeting after the notice of the meeting has issued where they are of the view that this is required due to the actual or perceived consequences of COVID-19 on the company.