Following a resolution by the Bundestag – Germany’s lower house of parliament – general shareholder’s meetings can continue to be conducted virtually until August 31, 2022 due to the coronavirus pandemic, a measure that is intended to provide planning certainty.
The German government decided back in 2020 in the wake of the coronavirus pandemic that general meetings could also be held virtually, thus ensuring that companies retain the capacity to act and make decisions. We at the commercial law firm MTR Rechtsanwälte can report that this decision by the Bundestag extends the option to conduct general meetings virtually until the end of August 2022.
Pandemic-related restrictions on meetings are also to be expected in the coming months. To ensure that certainty surrounding planning is based on a sound legal foundation, measures to facilitate meetings have been extended for stock corporations as well as other legal entities such as limited liability companies, cooperatives, associations, political parties, foundations, and homeowners’ associations. This means, for instance, that general meetings can continue to be held virtually.
Notwithstanding these measures, the legislature has added the caveat that the option to conduct general meetings virtually should only be exercised if this appears necessary in light of the prevailing state of affairs under the pandemic. In principle, however, it is left at the discretion of the board of directors to decide whether the meeting is held virtually or in person, it being necessary to take into account, on the one hand, the interests of the shareholders, partners, etc., and, on the other hand, to be mindful of the latest regulations and the aim of preventing the transmission of COVID-19.
If this extension had not been granted, the previous requirement for meetings to be conducted in person would have come back into effect from the beginning of 2022, something that is difficult to image given how the pandemic is currently developing.
The extension to the transitional arrangements is not bound up with substantive changes. Parliament already made the decision back in late 2020 to strengthen the rights of shareholders in connection with virtual general meetings, including granting them the right – as opposed to what was previously merely an option – to ask questions. At the same time, the board no longer has the discretion to decide whether or not to answer these questions.
All this means that companies and also foundations and associations can continue to hold purely virtual as well as hybrid meetings and make decisions, even if this is not enshrined in their respective articles of association.
Lawyers with experience in the fields of commercial law and company law can provide counsel.
