Online general meeting in Czechia

The conditions for holding a virtual general meeting at the time of the coronavirus and at other times and the associated risks

Holding a virtual general meeting, meaning without members being physically present in the same place or with some members present and others online, is an entirely practical solution in these times. How does it work?

Remote participation in the general meeting (what is termed in the law as ‘voting at a general meeting by technical means’) may only be used as standard procedure if such a method is provided for in the instrument of incorporation (memorandum of association or articles of association).

In light of the state of emergency at this time, however, it should temporarily stand that this form of participation need not be stated in the instrument of incorporation, this according to the government’s draft act on certain measures to mitigate the impacts of the SARS CoV-2 epidemic on persons involved in judicial proceedings, victims of crime, and legal persons and on the amendment of the Insolvency Act and the Enforcement Code (which should be approved by Parliament in the week beginning 6.4.2020 and ending 10.4.2020).

Moreover, the instrument of incorporation should set out the specific conditions of participation so as to make it possible to verify the identity of the member (and the voting rights associated with his/her/its stakes). If these specific terms and conditions do not exist in the instrument of incorporation, they are determined by the company’s governing body. The conditions, and all detailed technical prerequisites for participation, must be stated in the invitation to the general meeting (including, for example, a link to instructions on how to use the relevant technical means).

For the purposes of holding such a general meeting, it would be most advisable from our point of view to use a video conferencing platform where each person in attendance sees and hears the others. We need to think about this platform in advance, as free tools do not generally provide the opportunity to hold a meeting involving a higher number of people. For member identification purposes, the best solution is to send each member a special login code in advance. Votes themselves can be cast with a show of hands or by saying yes/no. We believe that the general meeting can also be recorded and the footage retained for some time after the meeting. This is also advisable for possible use in the event of a related dispute. The rules governing the recording of the general meeting should be laid down in the instrument of incorporation; otherwise the members should give their express consent to recording and the retention of footage at the beginning of the general meeting.

If a decision taken by the general meeting must be authenticated by notarial deed, the notary must verify that the method of participating in the general meeting complies with the statutory requirements for verifying the identity of members.

What if the general meeting is interrupted for technical reasons, or if at some stage some of the members in attendance do not see and/or hear the others? In such a situation we recommend that as soon as the chair of the general meeting becomes aware of this, he/she should repeat what happened at the general meeting during that time, or ask the members in attendance to repeat what they said. Votes on a particular point of the programme should be re-cast if the blackout occurred at the time of voting. It is also advisable to state in the instrument of incorporation, for example, that a substitute general meeting will be held in the event of a blackout which exceeds a certain length of time.

Act No. 90/2012 Sb. on business corporations, as amended
Act No. 89/2012 Sb., the Civil Code, as amended
Government draft act on certain measures to mitigate the impacts of the SARS CoV-2 epidemic on persons involved in judicial proceedings, victims of crime, and legal persons and amending the Insolvency Act and the Enforcement Code


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