Virtual shareholders‘ meetings now permanently possible – amend articles of association now
As a result of the “COVID-19 Act on Corporate Law” (COVID-19-GesG), meetings of shareholders and members of corporate bodies could be held as “virtual meetings” – without the need for such a provision to exist or be newly included in the articles of association. However, this was only intended as a temporary solution.
Now the choice of whether a shareholders’ meeting or general meeting is to be held in person or virtually is to be made permanently available. The legal basis for this is the “Virtual Shareholders’ Meetings Act” (VirtGesG), which came into force on July 14th, 2023.
Requirements for holding virtual shareholders’ meetings
The new VirtGesG allows corporations, cooperatives, and associations, among other entities, to hold virtual meetings in accordance with the provisions of the VirtGesG.
However, a mandatory requirement for conducting a virtual meeting is explicit permission in the articles of association. It must also be specified whether meetings of shareholders are always to be held virtually or if the convening body (typically the management) decides on the mode of conduct. For greater flexibility, it is recommended to let the convening body decide on the mode of conduct.
Possible forms of assembly
The VirtGesG provides for three different types of virtual meetings: In addition to the simple virtual meeting and the moderated virtual meeting, there is also the possibility of a hybrid meeting (i.e., a combination of virtual and physical participation).
Both the simple virtual meeting and the moderated virtual meeting have in common that there must be a “real-time two-way audio and visual connection” (“video call”) at all times. The difference between the two types of meetings is that in a simple virtual meeting, each participant has the opportunity to speak, take part in all votes, and raise objections, if necessary, while in a moderated virtual meeting, shareholders cannot speak or vote directly but must first be granted speaking rights by the chairperson of the meeting. The moderated virtual meeting is especially useful for meetings with a larger number of shareholders to ensure a structured and smooth conduct of the meeting.
A hybrid format is also possible, where the meeting takes place in person with a simultaneous virtual broadcast, and shareholders are free to choose between physical and virtual participation.
Special regulations for listed stock corporations
A number of special rules apply to listed stock corporations: For example, a provision in the articles of association that provides for the holding of virtual or hybrid meetings or leaves the decision on this to the convening body must be limited to a maximum duration of five full financial years. Additionally, shareholders who hold a total of at least 5% of the share capital can demand that the next ordinary general meeting be held in form of an in-person meeting or as a hybrid meeting.
The possibility of holding virtual meetings has been integrated into “permanent law”. It is therefore advisable to promptly amend the articles of association to ensure flexibility in conducting virtual meetings in the future.
This article is for general information only and does not replace legal advice. Haslinger / Nagele Rechtsanwälte GmbH assumes no liability for the content and correctness of this article.
16. August 2023
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