Does your company have an upcoming shareholders’ meeting and you want to avoid the risk of infection with COVID-19?
During the COVID-19 pandemic, companies face the question of how to implement the decision-making process of their collective bodies such as shareholders’ meetings or Board of directors. In the case of companies with two or more shareholders, one of whom may be a foreign person, holding a shareholders’ meeting at the company’s registered office and properly adopting resolutions may be a challenge for obvious reasons.
Use of electronic means
Pursuant to Act No. 62/2020 Coll. on certain measures in the judiciary during the state of emergency, collective bodies (shareholders’ meetings and meetings of the statutory body) may use voting by mail or hold their meetings (and subsequently also adopt resolutions) by electronic means, even if the company’s Memorandum / Articles of association do not explicitly regulate this possibility, which was a necessary condition for this procedure under the Commercial Code prior to the COVID-19 crisis.
However, electronic voting is not a universal remedy during the pandemic, as it requires the qualified electronic signature required for dealing with public authorities. This legal requirement is demanding in so far as it concerns securing the signature of a foreign shareholder or its statutory body, who usually does not have a qualified electronic signature in Slovakia.
In order to overcome the strict form requirement, foreign shareholder usually gets represented at the shareholders’ meeting by a lawyer based on a power of attorney, who can ensure the guaranteed electronic signature with a time stamp.
Voting by mail
During the state of emergency, the law has made it possible to vote by means of a ballot paper sent by post. We assume that the correspondence vote during the state of emergency will facilitate the adoption of resolutions by collective statutory bodies (board of directors), especially if the articles of association of the companies concerned do not provide for this possibility.
Per rollam voting
In case of shareholders’ meetings of limited liability companies, voting by mail does not represent a new alternative, since even before the crisis the shareholders were able to pass resolutions outside the shareholders meetings in accordance with Section 130 Slovak Commercial Code, in a so-called per rollam voting. This is also possible even if voting per rollam is not expressly regulated in the articles of association.
From a practical point of view, per rollam voting is possible for companies which have a managing director who can ensure the preparation and expedition of the voting papers with the draft resolution(s) to all (also foreign) shareholders, and in particular that the voting papers, which the shareholders have to send to the company’s registered office within a specific time limit, are counted and evaluated. The existence of an actual seat where mail is delivered and received, as well as loyal and professional conduct of the managing director are a necessary condition.
If the situation is complicated, we recommend that you authorize a lawyer to represent you at the shareholders’ meeting on the basis of a power of attorney, who will be able to represent you properly in the decision-making process even during the pandemic.
If you have any questions regarding the organisation and holding of shareholders’ meetings, our experts are ready to support you with legal advice.