Remote shareholders meetings post state of emergency

Royal Decree-Law 21/2020 (“RDL 21/2020”) has extended the possibility of holding general shareholders meeting remotely to December 31, 2020, keeping in place the other requirements set out in article 40 of Royal Decree Law 8/2020 (“RDL 8/2020”), in its wording under Final Provision One of RDL 11/2020. However, applying the measure to public limited companies whose shares are admitted to trading in official secondary markets presents significant practical difficulties.

The amendment to article 40 of RDL 8/2020 allows all limited companies to hold general meetings remotely, by video or conference call, until December 31, 2020, regardless of whether the state of emergency is in effect on the call notice or meeting date.

The new wording maintains the requirements for remote meetings:

(i) those with the right to attend, or those representing them, must have the necessary means to participate in the meeting;

(ii) the secretary must recognize the identity of the attendees and record them in the minutes; and

(iii) the minutes must be sent to the attendees’ email addresses immediately.

The amendment to section 40 has not been followed by a similar amendment to section 41(b) of RDL 8/2020, which specifically regulates these matters for listed companies. It should be remembered that this precept refers to cases where the restrictions imposed by the public authorities prevent holding the general shareholders meeting at the place and physical headquarters established in the call notice and, therefore, in accordance with the rule’s literal wording, it is not generally applicable to any general shareholders meeting held in the 2020 financial year, regardless of the applicable state of emergency and restrictions to movement and gathering on that date.

The requirements to hold the general shareholders meeting remotely in this case are in line with the characteristics and operating procedures of listed companies. Shareholders must be offered the option to participate in the meeting via any of these channels: (i) remote attendance, (ii) representation granted to the shareholders meeting chair by remote communication, and (iii) advance remote voting.

Ultimately, an effort to adapt the usual participation mechanisms to ensure compliance with the requirements established in the stated precept to guarantee that shareholders are able to attend the meeting, speak and vote will be required for listed companies to hold general shareholders meeting remotely under article 40 of RDL 8/2020.