1. Background

This note will summarise the main legislative developments introduced by the COVID-19 rules with respect to: face-to-face sessions of Shareholders’ Meetings and of the Board of Directors for adopting resolutions, and other alternative systems.

2. Applicable legislation:

  • Royal Legislative Decree 1/2010, of 2 July, approving the consolidated text of the Joint Stock Companies Act.
  • Royal Decree-Act 34/2020 of 17 November regarding urgent measures to support business solvency and the energy sector, and regarding tax matters.
  • Eighth final provision of Royal Decree-Act 5/2021, of 12 March, regarding extraordinary measures to support business solvency in response to the COVID-19 pandemic.

3. The Board of Directors (hereinafter BD) of both Private and Public Limited Companies

3.1. Videoconference or telephone conference

Exceptionally, during the year 2021 (even if not provided for in the articles of association) the board of directors of commercial companies may meet by videoconference or telephone conference call, provided that:

  • All members have the necessary means at their disposal.
  • Their identity is acknowledged by the secretary.

The meeting shall be deemed to have been held at the registered office.

3.2. Voting in writing and no session held

Exceptionally, during the year 2021 (even if not provided for in the articles of association) the board of directors of commercial companies may adopt agreements in writing without holding a session if so decided by the chairperson or requested by at least 2 members of the body.

The session shall be deemed to have been held at the registered office.

For public limited companies, the Joint Stock Companies Act allows voting in writing and without a session when no director objects, and provided there is mention of:

  • The agreements adopted.
  • The names of the directors.
  • The system used to determine the resolutions of the corporate body, stating the vote cast by each of them.
  • Express reference to the fact that no director has rejected this procedure.

4. Meeting of Members

Videoconference or telephone conference for both private and public limited companies

Exceptionally, during the year 2021 (even if not provided for in the articles of association) the meetings of members of commercial companies may meet by videoconference or telephone conference call, provided that:

  • All members have the necessary means at their disposal.
  • Their identity is acknowledged by the secretary.

The meeting shall be deemed to have been held at the registered office.

5. Conclusions

  • During the year 2021, even if not provided for in the articles of association, commercial companies may hold meetings of the Board of Directors and the General Meeting of Shareholders via electronic media.
  • During 2021, even if not provided for in the articles of association, the boards of directors of commercial companies may hold their meetings in writing and without a session if the chairman so decides or at the request of at least two of the members of the body.
  • Public limited companies may hold meetings of the Board of Directors in writing and without a session, provided that no director objects.
  • During the year 2021, both private and public limited companies may hold their meetings via electronic media.
  • Amendment to the Articles of Association (recommended by the end of 2021) providing for Shareholders’ Meetings to be held exclusively by electronic media must be approved by shareholders representing at least two thirds of the capital present or represented at the meeting.

 

It is therefore finally recommended that by the end of 2021 a provision be included in the Articles of Association providing for the possibility to hold sessions of the General Meeting of Shareholders via electronic media (videoconference or conference call) as well as in writing and without a session.

It is also recommended to include a provision in the Articles of Association providing for the possibility to hold meetings of the Board of Directors via electronic media (videoconference or conference call) as well as in writing and without a session.

TABLE ANNEX 

Board of Directors
S.A. S.L.
Face-to-face
Yes Yes
Telematic
Yes by Covid 19 Yes by Covid 19
Writing and without a session
Yes by Covid 19 Yes by Covid 19

Recommendation: modification of Bylaws to set out telematic and by writing and without a session.

Meeting of Members
S.A. S.L.
Face-to-face
Yes Yes
Telematic
Yes by Covid 19 Yes by Covid 19
Writing and without a session
Yes by Covid 19 Yes by Covid 19

Recommendation: modification of Bylaws to set out telematic and by writing and without sessions.

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