As the Corona virus is rapidly spreading and most companies will be hosting their annual general meetings during the upcoming months, we have summarized a few bullets to keep in mind.
As a general rule, general meetings must be held where the board of directors has its seat, but it is possible to disregard formal requirements regarding notice to the shareholders and location if all shareholders so agrees. Furthermore, it is permissible to allow shareholders to participate in general meetings via e.g. telephone, Teams, video conference, etc. Upon such event, the general meeting shall be held where the board of directors has its seat (provided that the articles of association do not specify otherwise). Please notice that the general meeting must approve that all or some of the shareholders participate via e.g. telephone (and may never prohibit a shareholder registered in the share register to participate in person, if such shareholder has announced its participation). Furthermore, in order to allow a shareholder to participate via e.g. telephone, there must be safeguards in place to ensure that the identity of the shareholder is valid and that the shareholder can participate in the voting.
Another alternative is to hold the general meeting so-called per capsulam, which means that decisions are being made without the shareholders being physically present. A general meeting per capsulam is only approved by the Swedish Companies Registration Office if everyone who is entitled to participate in such decision-making sign the decision in question. Holding a general meeting per capsulam is difficult if the company in question have many shareholders and is therefore best suited for low-complex and unanimous decisions.
Furthermore, it is permissible to postpone an annual general meeting, but it is not allowed to cancel an annual general meeting altogether (and in any event the annual general meeting must be held within six (6) months from the end of the financial year). Also, please notice that an extraordinary general meeting can be postponed and cancelled altogether (which is up to each company to decide on).
It is a violation of Swedish law to not hold an annual general meeting within six (6) months from the end of the financial year and the Swedish Companies Registration Office is not able to decide on any deferment. However, it is not a violation of Swedish law to postpone or cancel an extraordinary general meeting (but please notice that the cancellation of an extraordinary general meeting can result in several commercial disadvantages).
In addition to the abovementioned, please find below practical examples of how companies mitigate the spread of Covid-19 in regard to general meetings:
- meals, drinks and mingles have been removed;
- the shareholders have been informed about the possibility to vote by proxy;
- only essential matters are being discussed (e.g. statements from the chairman of the board and the CEO are published online instead);
- participants handle their own outerwear instead of the company hiring a service provider to do so.
If you want to learn more please contact your Synch contact or send an email to email@example.com.