As the Corona virus is rapidly spreading and most companies will be hosting their annual general meetings during the upcoming months, we have summarized at few bullets to keep in mind.
The Corona virus can affect the possibility of hosting the general meeting. Therefore, new legislation has been adopted 18 March 2020 to ensure that companies that are unable to host the general meeting in due time for the annual report to be approved and submitted to the authorities, are eligible to an extension of the deadline for submissions in order to meet their obligations in a timely manner.
The Assembly Prohibition (link) took effect 18 March 2020. The prohibition led to a ban on holding and attending large assemblies, etc., including general meetings with more than 10 participants. The Minister of Health and Elderly has therefore also extended the deadline for submission of the annual report, hence the annual report must now be submitted no later than eight weeks after the end of the Assembly Prohibition. The Assembly Prohibition and the extension for submission of the annual report is in effect until 30 March 2020 but is expected to be prolonged.
The extension applies only to companies covered by the Danish Financial Statements Act (årsregnskabsloven) and under certain conditions. It is therefore only possible to postpone the submission of the annual report, if the following conditions are met:
- The general meeting has not already been held, where the annual report was approved
- The company has more than 10 shareholders, and therefore these cannot legally attend the general meeting due to the Assembly Prohibition
- The company is not able to hold the general meeting electronically without any opportunity for shareholders to physically attend, due to lack of provision hereof in the articles of association. If such provisions are desired, contact Synch’s corporate experts, more information down below.
- Can the general meeting be cancelled due to COVID-19?
It is possible for the company’s board of directors to cancel the general meeting right up until the commencement of the general meeting. It is possible to cancel even if the general meeting has been requested through notice to the shareholders. However, a new ordinary general meeting must then be summoned hereafter.
Notice of the general meeting must be requested in unlisted companies at the earliest four weeks and no later than two weeks before the general meeting. For listed companies, the notice must be sent no earlier than five weeks and not later than three weeks before the general meeting.
The general meeting shall be held in due time for the annual report to be approved by the general meeting and submitted to the Danish Business Authority before the expiry of the deadline in the Danish Financial Statements Act. The deadline for companies with the calendar year as the financial year is April 30 (listed companies) and May 31 (unlisted companies), respectively. This deadline is thus extended with the newly adopted legislation.
- What is the opportunity to hold an electronic general meeting instead of a physical general meeting?
The general meeting may decide to hold general meetings electronically without any opportunity for parties to physically attend, so that the meeting is held by electronic means alone, cf. the Company’s Act art. 77 (2). The resolution must be recorded in the company’s articles of association.
If such resolution is recorded in the company’s articles of association, the extension of the deadline for the submission of the annual report no longer applies for the company.
If the articles of association of your company do not provide for the possibility of conduction general meetings electronically or remotely, or if it is unclear whether it is possible, Synch’s corporate law experts are happy to review your articles of association free of charge in order to establish if/what changes are necessary and how they can be implemented.
In addition to the abovementioned, please find below practical examples of how companies mitigate the spread of Covid-19 with regards 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.
Link to the newly adopted legislation: