UPDATE – Crisis measures on the impact of Covid-19 on board and shareholders’ meetings have entered into force

15 Apr 2020

! UPDATE ! The duration of the measures discussed in this news flash has been extended up to 30 June 2020.

In our news flash of 31 March 2020, we have examined the draft crisis measures proposed by the Belgian government aimed at offering certain alternatives and solutions for companies being faced with the quasi impossibility to organize physical board and/or shareholders’ meetings (for more information, click here)

These measures have now been officialised in a numbered Royal Decree under special powers (n° 4) of 9 April 2020 containing various provisions concerning co-ownership and the law on companies and associations in the context of the efforts to combat the Covid-19 pandemic (the “Royal Decree n°4”), published on the same day (see here).

Entry into force and scope

The Royal Decree n°4 is applicable to all companies, associations, legal entities as well as to legal persons established under specific legislation.

It has entered into force, with retroactive effect, as of 1 March 2020 and shall apply until 3 May 2020 included, save further extension by a new Royal Decree. Are concerned (i) all board and shareholders’ meetings to be held or which should have been held as of 1 March 2020 and which have not (yet) been held, (ii) the convening notices for said meetings, which have been sent or published or which should have been sent or published as of 1 March 2020, and (iii) some compulsory periods within which a.o. annual accounts must be approved and filed, starting as of 1 March 2020.

It will however not apply to board and shareholders’ meetings which have been held as of 1 March 2020 according to the usual rules.

What is the impact on your board or general shareholders’ meeting?

The Royal Decree temporarily allows for increased flexibility in the organisation of board and shareholders’ meetings, even if certain solutions are not provided for in the articles of association or are even expressly prohibited. These measures are optional, meaning that it remains possible (e.g. in companies with very few shareholders) to hold a normal shareholders’ meeting (in compliance with the covid-19 measures, in particular in terms of social distancing) or to adopt unanimous written shareholders’ resolutions.

Shareholders’ meetings

First option: Remote general meeting (without physical presence)

The management body may decide to prohibit all physical participation to a shareholders’ meeting and require the participants (shareholders) to exercise their rights exclusively by:

  • remotely voting “by correspondence”, prior to the general meeting, via a voting form made available by the company (e.g. sent by email or published on its/a website), whereby, besides the agenda items, the voting form should also contain a proposal of resolution for each item; or
  • giving a proxy prior to the general meeting, whereby the board of directors may require that the proxy holder would be a person it designates. The proxy holder is only allowed to exercise the voting right on behalf of the shareholder if the proxy contains specific voting instructions for each item on the agenda.

Both possibilities should be offered to the shareholders.

Voting forms and proxies should be returned to the address as mentioned by company, using whatever means, be it an email including a scanned copy or a photo of voting form or proxy, duly completed and signed. Companies may require that said documents reach them not later than the 4th day prior to the meeting.

Convening notices and other documents to be made available to the shareholders/participants do no longer require to be sent by regular post nor kept available at the company’s registered office; if possible, they will be sent by email.    

The members of the bureau (if any), the directors, the statutory auditor and the proxy holder can also validly participate remotely, be it by way of a tele- or video conference.

Even if not provided for in the articles of associations, companies and associations are also allowed to organize virtual general meetings, e.g. by putting electronic means of communication at the disposal of the participants.

Furthermore, the board of directors may require that (i) only written questions are submitted by the participants and (ii) that they will be communicated at the latest on the 4th day preceding the general meeting. These questions shall be answered in writing at the latest on the day of the general meeting, and at least prior to the vote, in such a way as to ensure they can reasonably reach the participants (e.g. via email). Questions can also be answered orally during the meeting in case of virtual meeting (see here above) or if the meeting is broadcast live (via tele-, or videoconference) or recorded for later broadcast.

In listed companies, additional (more stringent) provisions apply as follows:

  • convening notices and other documents to be made available to the shareholders do no longer require to be sent by regular post to them nor kept available at the company’s registered office;   
  • voting forms and proxies must reach the company not later than the 4th day prior to the meeting;
  • questions must reach the company not later than the 4th day prior to the meeting; and
  • answers to the questions shall be published on the company’s website.

Second option: Postponement of the general meeting

The board of directors may also decide to postpone any general meeting to a later date of its choice, for up to 10 weeks after the deadline as provided by law (if any). In a company whose financial year closed on 31 December 2019, the annual general meeting (which normally should be held within 6 months as of the closing date) could therefore be postponed till 8 September 2020 ultimately, meaning that the approved annual accounts should be filed not later than 8 October 2020.

Postponement is however not possible for general meetings which need to be convened (i) in case the company’s net assets are negative or risk of becoming negative (the so-called alarm bell procedure), (ii) at the request of shareholders holding (at least) 10% of the voting rights, and/or (iii) at the request of the statutory auditor.

A general meeting which has been called for one of these reasons, cannot be postponed but may still be held without physical presence (see above, first option).

Royal decree 4 - Postponement of annual general meeting (AGM)

In case the convening notices would already been sent out, the management organ could still decide to make use of the increased flexibility offered by the Royal Decree n°4 (including a change of location).

If the first option would be pursued, the original convening notices can be changed without the need to send a new one. Communication of such change towards shareholders should be made using the most appropriate way (on the company’s website, via email or even by regular post). In listed companies, such changes must be announced (i) by way of a press release and (ii) on the company’s website, at the latest on the 6th day prior to the (original) date of the meeting.   

As regards the annual general meetings specifically, which would already have been convened, they can be postponed either, whereby appropriate communication is required (see here above). In listed companies, this compulsory means an announcement through a press release and via a post on their website at the latest the 4th day prior to the date of the meeting already convened.     

The postponed meeting will however require the usual convening formalities to be applied.

Board meetings

All board of directors’ meetings (including the board meeting deciding to hold the general shareholders’ meeting remotely or to postpone the general shareholders’ meeting) can be held by way of electronic communication (e.g. via teleconference or videoconference) or replaced by unanimous written resolutions (even if this is not provided for (or prohibited) in the articles of association). For notarized resolutions (e.g. use of the authorized capital), it is sufficient that one director (or proxy holder) is physically present to sign the deed in front of the notary.

For updates regarding the crisis measures, we advise you to regularly check the PwC Legal website. PwC Legal experts remain ready to assist you.

Contact us

Bart Vanstaen

Bart Vanstaen

Advocaat Vennoot / Avocat Associé, PwC Legal BV/SRL

Tel: +32 473 52 62 49

Elise De Baerdemaecker

Elise De Baerdemaecker

Advocaat Vennoot / Avocat Associé, PwC Legal BV/SRL

Tel: +32 473 91 06 11

Jean-François Mouchet

Jean-François Mouchet

Counsel, PwC Legal BV/SRL

Tel: +32 477 35 01 21

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