Emergency law with corona measures entered into force
Since the 1st day of January 2007 the law provides the possibility of being present at the shareholders’ meeting by an electronic communication tool. However, this option must be explicitly included in the articles of association. If you are considering a virtual shareholders’ meeting, first check your articles of association!
Since the 1st day of January 2007 the law provides the possibility of being present at the shareholders’ meeting by an electronic communication tool. However, this option must be explicitly included in the articles of association. If this option is not regulated, it is according to Dutch law not possible to attend the meeting as a shareholder by an electronic communication tool.
When the articles of association provide for this possibility, the law makes additional requirements:
- the shareholder must be able to be identified by the electronic communication tool;
- the shareholder must be able to take note of what has been spoken about in the meeting; and
- the shareholder must be able to exercise his voting rights.
In addition, the articles of association may require that the shareholder is able to contribute to the deliberation.
A full virtual shareholders’ meeting is yet not possible, because an actual place of the meeting is required. A partial virtual shareholders’ meeting is possible, provided that this is regulated within the articles of association and that the legal and statutory requirements are being met with. These requirements ask for a proper way to communicate with each other, whereby the digital attendees can be identified. By law, it is not necessary for the shareholders to have a say, but the articles of association may contain this additional requirement.
In short: If you are considering a virtual shareholders’ meeting, first check your articles of association!
If these were lastly amended before the 1st day of January 2007, the articles of association will in any case not provide the possibility of a virtual meeting.
The legislator recently recognized that for some companies the shareholders’ meeting is the only legal permitted method of decision-making, but that setting up a shareholders’ meeting is currently not possible because of the corona directives.
That is why the legislator has made an emergency law that makes the following possible:
- it is possible, where physical consultation and decision-making procedures are prescribed, to communicate, on a temporary basis, exclusively by electronic means of communication, provided that this is stated in the convocation letter for the meeting;
- the board may determine that shareholders do not have physical access to the shareholders’ meeting, provided that the shareholders’ meeting can be followed electronically and that shareholders have the opportunity to ask questions until no later than 72 hours before the meeting;
- the questions asked must be answered during the meeting at the latest and the answers must also be shared on the website or any other accessible means;
- the board must make every effort to ensure that questions can be asked during the meeting;
- if a shareholder is unable to participate optimally in the virtual shareholders’ meeting, for example because the shareholder is not able to ask his questions during the virtual shareholders’ meeting, it has no consequences for the validity of the decisions;
- the board may determine that votes can only be cast electronically, provided this is stated in the convocation letter; and
- the board may decide to extend the period for drawing up the annual accounts by five months. The shareholders’ meeting cannot decide again to extend the term.
For companies with a financial year equal to the calendar year, the last rule means that, if the board extends the period, the annual accounts must be drawn up by 31 October 2020 at the latest. However, the deadline for filing the annual accounts has not changed, as a result of which companies with a financial equal to the calendar year must in any event file the annual accounts for 2019 before 31 December 2020. If it is not possible due to the coronavirus, the late filing does not constitute evidence of improper performance of duties for the purpose of holding directors liable in the event of bankruptcy.
The emergency law is adopted by the Upper and Lower Houses of Parliament and entered into force on the 24th day of April 2020, with retroactive effect to the 16th day of March 2020. The rules apply until the 1st day of September 2020.
Similar emergency measures have been adopted for associations, cooperatives, public limited companies and foundations.