Legal Alert - 2020/03/27 How to organise the Annual General Meeting in the light of the measures taken against the COVID-19 virus?

Many companies have scheduled their annual general meetings in the months of April and May. Since
physical meetings are not recommended in the context of preventive measures against the COVID-19 virus,
the question arises what the possible alternatives are to the planned physical annual general meeting and
the meeting of the management body in preparation thereof.

Written or electronic meeting of the management body

A meeting of the management body normally takes place before the general meeting, at which it approves
the annual report, adopts the annual accounts and sets the agenda of the general meeting. The meeting of
the management body can be organised quite easily by means of written decision-making. In a previous
article we already mentioned that the new Code on Companies and Associations has extended this possibility
for the management bodies of the NV, the BV and the CV. According to these new rules, the decisions of
a collegial management body may be taken by unanimous written agreement of all directors, with the
exception of those decisions for which the articles of association exclude this possibility.

In addition, there seems to be no objection to an electronic meeting of the management body, provided
that decisions can be taken in a regular manner. This implies that the electronic means used must make it
possible to identify the directors and enable them to participate in the deliberation and decisions.

Written general meeting

The Code on Companies and Associations allows the general meeting to be held in writing by means of a
circular, except in those cases where an authentic instrument is required. The only condition is that the
articles of association do not exclude this possibility. Such exclusion may be general or for certain decisions,
such as the approval of the annual accounts or the dismissal and appointment of directors. If this is not
the case, the shareholders may, unanimously and in writing, take all decisions that that fall within the
competence of the general meeting.

If sufficient time is still available and the number of shareholders is not too large, a general meeting by
written decision-making is relatively easy to organise. The management body draws up a proposal for
written decisions in advance and sends it to all shareholders by circular letter. The decision of the written
general meeting is taken at the moment the last shareholder has signed the circular.

Electronic general meeting

With all the electronic means of communication available today, such as (video)teleconferencing,
webcasting, web conferencing, chat (e.g. skype, MS Teams), one could consider organising the general
meeting electronically. However, there are two main possible limitations. Firstly, the Code on Companies
and Associations requires that the articles of association explicitly allow the general meeting to be held
electronically. Secondly, one should not lose sight of the fact that the electronic general meeting still has to
be combined with a (limited) physical general meeting. The officers of the general meeting (the chairman,
the secretary and the tellers), the management body and, where appropriate, the statutory auditor may not
participate in the general meeting by electronic means.

The Code on Companies and Associations also contains a number of rules that must be respected. The
convocation must contain a clear description of the procedures to provide for remote electronic participation.
The company must be able to verify the capacity and identity of the shareholders on the basis of the
electronic means of communication used. The shareholders should be enabled to directly, simultaneously
and continuously take note of the discussions at the general meeting and to exercise their voting rights on
all matters on which the meeting is required to take a decision.

Possible postponement of the general meeting

If it is not possible to hold the annual general meeting on the date stated in the articles of association, it will
have to be postponed. In doing so, the statutory deadlines for the approval and filing of the annual accounts
must not be overlooked. In particular, the annual accounts must be approved within 6 months of the end of
the financial year and filed with the National Bank within thirty days of the approval and at the latest seven
months of the end of the financial year. If the date in the articles of association and/or the legal deadlines
cannot be met, the directors will have to request special discharge for non-compliance with the articles of
association and/or the Code on Companies and Associations.

Minister of Justice Koen Geens is working on a Royal Decree that will facilitate the organisation of general
meetings of co-owners, as well as all ordinary meetings of the legal entities that have to be postponed
until after the end of the crisis related to the COVID-19 virus. We will inform you as soon as the final text is
available.

Mazars can assist you with regard to the above. Please contact us for further information.

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Legal Alert March 2020
Legal Alert March 2020