Covid-19 emergency: the new look of the shareholders' meeting
Regulatory compliance and management of shareholders' meetings at the time of the Coronavirus: postponed approval of the 2019 financial statements and adoption of alternative ways of exercising voting rights.
Due to the declared state of emergency resulting from the COVID-19 epidemic, the Italian Legislator had to intervene to regulate the so-called "corporate obligations" and, by means of a specific provision contained in art. 106 of Decree Law no. 18/2020, said new provisions relating to the functioning of the shareholders' meeting, also in derogation of the civil or statutory regulations.
More in detail, with the aim of facilitating the activity of the companies, even if with all the restrictions on the gathering in the same place, the Legislator has moved on two fronts establishing that:
- annual meetings may be convened within 180 days of the end of the financial year;
- the shareholders' meetings may be held without the physical presence of the shareholders in a single place, and the procedures for participation and exercise of voting rights may be carried out by means of specific instruments that allow them to be held.
By express regulatory provision, these provisions apply to meetings convened by 31 July 2020, unless the state of emergency in the national territory should continue after that date; in the latter case, the provisions in question would remain in force for the same period of time.
Deadlines for shareholders' meetings for the approval of financial statements
In this regard, the Government gives the companies the power to call the Ordinary Shareholders' Meeting within a longer period of 180 days from the end of the financial year, therefore by 28 June.
The new provision derogates both from the statutory regulations (which set an ordinary term of 120 days from the end of the financial year with the possibility of extension up to 180 days) and, if existing, from the provisions of the Articles of Association.
Pursuant to art. 106 of Legislative Decree no. 18/2020, the use of the longer term does not have to be justified by the company and represents, for the company, a mere faculty. In other words, it will be up to the company concerned to decide, in first call, to fix the shareholders' meeting within the ordinary time limit or to make use of the exceptional derogation provided for by the Decree Law.
In any case, when approving the financial statements, it should be noted that - with reference to persons whose financial year coincides with the calendar year - the Coronavirus emergency would not be included among the subsequent events that must be included in the financial statement values (since they relate to the 2020 financial year), but, in view of its relevance, it should be mentioned among the events occurring after the end of the financial year that must be explained in the Notes to the financial statements.
Attendance at Shareholders' Meetings and exercise of voting rights
In addition, the Decree in question authorises ordinary and extraordinary shareholders' meetings to be held behind closed doors, allowing companies to provide, already in the notices of call, for the use of those instruments - such as postal voting, electronic voting, participation in the shareholders' meeting by telecommunication means, the designated representative - that allow the participation in the meeting and the expression of the right to vote without the necessary physical participation of the shareholders in the same place.
More precisely, the Legislator lays down certain rules of general application (paragraph 2) and others specific to the individual types of company concerned (paragraphs 3, 4, 5, 6).
According to these regulatory provisions, all limited liability companies may allow the general meeting to be held, "even exclusively", by means of telecommunication means that guarantee the identification of the participants, their participation and the exercise of voting rights, without, in any case, the need for them to be in the same place.
Procedures for convening the shareholders' meeting
The aforementioned regulatory provision would seem to go beyond the line drawn by the very recent maxim no. 187/2020 of the Milan Notary Board, which would seem to refer to a place where the shareholders' meeting is convened. In practice, it would seem feasible to call the meeting by telecommunication means without indicating any place to call the meeting but, if necessary, merely specifying that the place where the meeting is to be held is considered the place where the secretary, who will have to record the minutes of the meeting, is located.
In addition to this, with specific reference to the srl, account is taken of the peculiarity that allows them to express their vote by written consultation or by written consent, also in derogation of the civil and statutory provisions.
More precisely, as the document drawn up by Assonime makes clear, these modalities can also be used when:
- they are not provided for in the memorandum of association;
- the decision concerns amendments to the memorandum and articles of association or decisions relating to transactions involving a substantial change in the company's objects or a significant change in shareholders' rights or capital losses exceeding one third;
- there is a request to use the shareholders' resolution by directors or a qualified number of shareholders.
Lastly, with regard to listed companies, recourse to the institution of the "designated representative" by the company is facilitated and it is possible to provide in the notice of call that attendance at the shareholders' meeting may take place exclusively through the designated representative, to whom proxies or sub-delegations may be granted in derogation of the maximum number provided for by industry regulations.