In light of the recent government announcement relating to the requirement of companies to hold AGMs, it is important for directors and shareholders to consider how they would do so in line with the restrictions on movement.
One restriction includes not being allowed to be in gatherings of more than two people. This raises the question of how an AGM is held if shareholders are not permitted to travel? It is unlikely that travel to an AGM would constitute “essential” travel for the purposes of work under the lock-down rules. However, it may be permitted if those persons are required to form a quorum and to that end the company could change the meeting venue.
In order to progress the meeting, it should be held behind closed doors and shareholders should be encouraged to appoint the chair of the meeting as proxy to exercise their votes. The constitutions of many companies permit proxies to be sent electronically to ease communication.
Some companies may wish to explore the possibility of holding a virtual meeting. Current company law does not prevent electronic meetings provided those persons who are not present together at the same place may by electronic means attend and speak and vote at it. This would include holding meetings by telephone. However, the rules of the company should be checked to ensure that the they do not restrict the holding of meetings electronically.
It is unclear as to whether a meeting can be held entirely virtually. However, it may be possible to have a mixture of both whereby a physical meeting contains the quorum with other shareholders joining by virtual means. There are a number of alternative practical steps being explored. For further information contact Philip Chapman, Corporate Director Thursfields Solicitors, on 0121 227 3879 or email firstname.lastname@example.org.