For the past two years, the temporary emergency law COVID-19 has been in force. This temporary emergency law made it possible to hold the general meeting digitally. As discussed in our previous blog, this emergency law will expire on February 1 2023. As an extension of this, a preliminary draft for a permanent legislation for the digital general meeting was submitted for consultation on December 7 2022.
This (hopefully) future law is indicated as the Digital General Meeting of Private-law Legal Entities Act. The legislation will contribute to the modernization of Dutch corporate law. The starting point for this regulation is that the online general meeting will reflect the physical general meeting as much as possible. This means that shareholders must be able to fully participate in the digital meeting as if they were physically present.
Also for the cooperation and mutual society
In addition to the online shareholders meeting for the public limited company and private company (N.V. and B.V.), the preliminary draft also contains a legislation for the general meeting of the cooperation and mutual society, which corresponds to the regulation for the public limited company and private company (N.V. and B.V.). For the general meeting of an association, the preliminary draft contains some differences, this is because the association usually does not have a commercial character. The foundation is not discussed in the preliminary draft because the foundation has no legal regulation regarded to the general meeting; so changing the law is not necessary. Some conditions for the digital meetings are briefly discussed.
To guarantee the interaction as much as possible between the board, shareholders and other persons who are entitled to attend, it is mandatory for companies to use a two-sided audiovisual means of communication. This also applies to the hybrid meeting (which is both physical and digital). So a live stream is not enough; it must be possible for shareholders to speak with image and sound.
Shareholders must also be able to vote live, in both fully digital and hybrid general meetings. The shareholder who participates digitally in the meeting must be able to be identified by the electronic means of communication. The way in which the identification takes place is left to practice.
In addition, the company has to ensure to have an adequate communication link and that the used software is suitable for holding a digital meeting.
Convening the meeting
The rules for convening a general meeting will also be modernized and simplified. For example, the consent requirement of a shareholder in order to be able to be convened electronically no longer applies. It will no longer be necessary for the non-listed public limited company (N.V.) to convene its shareholders for a general meeting by means of an advertisement in a national newspaper, this can, for example, be replaced by a message on the their own website. Finally, information about the procedure for participating in the meeting and exercising voting rights electronically must be included in the notice of convening for the digital general meeting.
The consultation period runs until 6 February 2023, until then comments can be made on the preliminary draft.