Covid-19 and Alternative meeting options

Alternative meeting options: don't let corona paralyze your general meeting or board of directors

The beginning of spring traditionally also heralds the season of the annual general meetings. However, in times of Covid-19 threat it is in most cases not appropriate to organize a physical general meeting and for the time being the corona measures don’t even allow this. The same applies to board meetings.

However, this does not mean that the bodies of your company or association can no longer meet and decide during the corona crisis. In this newsletter we inform companies (I) and associations (II) about the legally permitted alternatives to a physical meeting of both the general meeting and the board of directors.

We also wish to draw your attention to the fact that the Belgian federal government is currently preparing a Royal Decree that would allow companies and associations to postpone their physical general meeting and regulate the modalities of remote participation and voting. The contents of this upcoming  Royal Decree, with 19 April 2020 as renewable end date, would be as follows:

(1) General meetings convened or to be convened before 19 April 2020 can be postponed until ten weeks after the deadline (usually 30 June). If the general meeting has already been convened, shareholders or members must be correctly informed of the postponement;

(2) General meetings can also take place remotely (e.g. by telephone or videoconference) on the normally scheduled date, whether or not in combination with proxy voting (proxy granted to a person appointed by the board); and

(3) The board of directors can  resolve by unanimous written consent. Decisions to be taken before a civil law notary  continue to require a physical meeting, but only the civil law notary together with one member of the board or a person appointed by the board need to be physically present. The other members of the board may participate remotely by electronic communication.

We will follow up on this closely and will keep you informed.

I.            Companies

General meeting of shareholders

Remote meetings

Shareholders of a BV/SRL, CV/SC and NV/SA can validly participate in the general meeting remotely via an electronic means of communication if this possibility is explicitly included in the articles of association. In doing so, the shareholders must at least be able to follow the meeting directly and simultaneously and exercise their voting rights, for example by tele- or videoconference. Shareholders may also vote by letter or by electronic means prior to the general meeting, again if this possibility is explicitly provided for in the articles of association.

However, the Companies and Associations Code (CCA) does not allow the directors and the statutory auditor(s) to participate remotely in the general meeting. They should therefore be asked to waive the convening formalities and the right to claim the annulment of the decisions. The aforementioned Royal Decree in preparation would, among other things, provide for a relaxation in this respect.

Due to the current exceptional circumstances and in the interest of the company, we consider it justifiable to organize a general meeting remotely, even if this possibility is not provided for in the articles of association. However, it is important to ensure that all shareholders have the opportunity to participate and that an effective and interactive debate can take place. It is also important to thoroughly justify the choice of a remote general meeting with a reference to the corona measures and to carefully minute the discussions and voting.

Written general meeting

There is also a possibility to meet without any form of physical meeting: the written general meeting. It suffices for each shareholder to sign the proposed resolution in writing for approval, without prior debate. Under the CCA, the board does not have to comply with the formalities for convening the general meeting in this case. In addition, the members of the board and the statutory auditor(s) do not have to be convened, but at their request they can consult the decisions taken.

The possibility of a written general meeting should not be provided for in the articles of association. There are, however, a number of important limitations to this working method. The most important one: unanimity is required, so all shareholders must agree and confirm their agreement in writing. A written general meeting is also excluded for resolutions that must be taken before a civil law notary, e.g. an amendment to the articles of association.

Decisions on the approval of the annual accounts and the granting of discharge to the directors do not require an authentic deed and can therefore be validly taken by a written general meeting.

Management body

Remote meetings

No special rules apply to the management body of a BV/SRL, CV/SC and NV/SA, unless such rules are included in the articles of association or internal regulations. Provided that an effective and simultaneous deliberation is guaranteed, nothing prevents the management body from meeting remotely, for example by tele- or videoconference. It is not required that this possibility is provided  for in the articles of association.

Written decision-making

The management body may also decide unanimously in writing without a physical meeting, with the exception of decisions for which the articles of association would exclude this possibility. Contrary to what was the case before the entry into force of the CCA, written decision-making is now no longer subject to the conditions of urgent necessity and the interest of the company. Important: if the articles of association of the company have not yet been adapted to the CCA and would still contain restrictions on written decision-making, these restrictions will have to be complied with.

II.          (International) associations

General meeting of members

For (international) not-for-profit organisations, the legislator has not laid down any special rules, neither for a remote general meeting nor for a written general meeting.

Remote meetings

For (international) associations, a remote general meeting is in most cases considered as the preferred alternative.

A remote general meeting is in any case allowed if this is provided for in the articles of association.

If a remote general meeting is not provided for in the articles of association, it is in principle not possible to hold the general meeting remotely. However, in the same way as for companies, we consider a remote meeting to be justifiable in these special circumstances provided that a number of conditions are met. A minimum requirement is that all members have the opportunity to participate in the meeting and that an effective and interactive debate can take place. Again, the motto is: justify the choice for a remote general meeting thoroughly and carefully minute the discussions and voting.

Written general meeting

The law does not provide for the possibility of a written general meeting but, analogous to the CV/SC, it can be argued that general meetings of not-for-profit organisations (vzw/asbl) can also unanimously decide in writing provided the articles of association allow for this possibility. Taking into account that for not-for-profit organisations (vzw/asbl) the law requires that, in addition to the members, also the directors and statutory auditor(s) have to be convened for a general meeting, it is recommended to request the directors and statutory auditor(s) to waive the convening formalities and the right to claim the annulment of the decisions. For international not-for-profit organisations (ivzw/aisbl), a unanimous written decision of the members is in any case possible if this is provided for in the articles of association.

Written meetings without explicit authorization in the articles of association are in principle not recommended. A workable solution justifiable in the interest of the association, could consist of a unanimous waiver by all members of the convening formalities and the right to claim the annulment. Once again, it must be ensured that in a not-for-profit organisation (vzw/asbl) also the directors and statutory auditor(s) sign such waiver.

Management body

Remote meetings

No special rules apply to remote meetings of boards of directors of (international) associations. Therefore, the same applies as for companies: unless prohibited by the articles of association, the board can meet remotely provided an effective and simultaneous deliberation is guaranteed (for example by means of tele- and videoconferencing).

Written decision-making

The board of directors of a not-for-profit organization (vzw/asbl) may unanimously decide in writing without a physical meeting, except for decisions for which the articles of association would exclude this possibility. Please note that if the articles of association of a not-for-profit organization have not yet been adapted to the CCA and still contain restrictions on written decision-making, these restrictions must be complied with.

As far as international not-for-profit organizations (ivzw/aisbl) are concerned, written decision-making is possible if this is provided for in the articles of association. If this is not provided for in the articles of association, it is recommended that the directors unanimously waive the convening formalities and the right to claim the annulment of the decisions.

If you have any questions about the meeting facilities of your company or (international) association, you can contact the Curia Corporate and Non-profit team: Yvette Verleisdonk, partner (yvette.verleisdonk@curia.be) and Sarah Verschaeve, partner (sarah.verschaeve@curia.be).