Last Friday, the Dutch Minister of Justice presented a draft emergency act on corporate meetings to the Council of Ministers. In this draft law, it is proposed to discard legal and statutory requirements for convening physical corporate meetings, but to allow meeting via electronic means for the time being.
Aside from listed companies, other legal entities such as private limited liability companies, foundations and associations may meet “remotely” due to COVID-19. This draft law is in accordance with calls made to the Dutch government, as well as with international developments.
The management board of a legal entity may decide to hold a general meeting via livestream (audio or video), as long as the shareholders or members can participate in the meeting. This implies that they should be enabled to pose questions (whether or not prior to the meeting), which need to be answered during the meeting. Even if a shareholder or member is not able to participate in the most optimal manner, this does not cause resolutions that are passed at such meeting to be invalid.
Further, the emergency act renders the opportunity to postpone the statutory term for holding annual general meetings (currently once per financial year), as well as the statutory term for drafting the annual accounts (currently 5 months from financial year-end, although law already grants the opportunity to have this term prolonged with another 4 to 5 months).
Considering the current law already offers the opportunity to postpone these actions to a longer term (ie to the second half of 2020), the Minister of Justice seems to anticipate to a longer disturbance of corporate “normal” life.
The complete wording of the emergency act has not been published yet, despite being approved by the Council of Ministers. The draft law has now been forwarded to the Dutch Council of State for legislative advice, after which it will be presented to Parliament (consisting of two chambers) for adoption. It is therefore unknown by when this draft law will be adopted, but given its nature it might (hopefully) not be too long.
