On 20 December 2020, the Belgian Federal Parliament adopted a new act (the Act), published in the Belgian official Gazette on 24 December 2020, containing various temporary and structural provisions relating to shareholders meetings of companies and members meetings of associations. The purpose of the Act, is to help deter the spread of COVID-19.
Section 11 of the Act refers to and improves the flexibility of the decision-making process and the holding of general meetings of shareholders of Belgian companies or members of Belgian and international non-profit associations based in Belgium.
Greater flexibility in the decision-making and meeting process
The Act contains a new set of provisions amending, in some instance only temporarily, general provisions of the Belgian Companies and Associations Code1.
The Act was motivated by the need to contain the spread of the virus, and to limit or avoid physical contact between shareholders /members when meetings are not absolutely necessary. The Act’s temporary measures are deemed necessary until a vaccine is sufficiently deployed, thus allowing for relaxation of measures, as explained in the preamble of the Act (exposé des motifs, memorie van toelichting).
Section 11 of the Act concerns (i) the organisation of remote general meetings, (ii) the right to vote by electronic means prior to general meetings and (iii) the procedure to be followed for the adoption of resolutions in writing and by unanimous vote in Belgian companies and non-profit associations based in Belgium.
Revised process for holding remote general meetings
How was the scope of the law extended?
The Belgian Companies and Associations Code already provided that within public limited companies (société anonyme, naamloze vennootschap), as well as private limited companies (société à resonsabilitée limitée, besloten vennootschap) and cooperative companies (société cooperative, coöperatieve vennootschap)2 shareholders could participate remotely in the general meetings, by electronic means of communication, if this was provided in the articles of association.
In this respect, the Act amended the Companies and Associations Code which now expressly allows the possibility for the management body (the sole director, board of directors, the supervisory board, as the case may be) to organise general meetings to be held remotely, even if this is not expressly provided for in the articles of association. Moreover, an important development is that the Act extends the possibility for non-profit associations (whether national or international) based in Belgium to hold general meetings remotely, under the same conditions as those applicable to companies.
What are the conditions that apply to companies and associations in order to organize general meetings remotely?
The right to hold general meeting of shareholders or of members remotely (by electronic means) is subject to the following legal requirements:
- the means of communication used must enable the company or the association, as the case may be, to control the capacity and identity of the shareholders or the members who participate in the meeting;
- the means of communication must at least enable the shareholders or the members, as the case may be, "to be directly, simultaneously and continuously informed of the discussions within the meeting and to exercise their right to vote on all the points on which the meeting is called to decide"; and
- the company or the association, as the case may be, must grant the right to the shareholders or the members participating in the meeting by electronic means to actively participate in the deliberations and to ask questions. According to the Act, until 30 June 2021, there is a possibility for the management of a company or an association, as the case may be, not to comply with the third requirement mentioned above provided, however, that said management has good and valid reasons for not complying and that said management informs the shareholders or the members, in the convening notice of the meeting, of the reasons why the electronic means of communication will not enable the participants to actively participate in the deliberation or to ask questions.
In any event, the management body must (i) indicate how the above legal requirements will be met in the convening notice of the general meeting and (ii) comply with the other legal requirements set out in the Companies and Associations Code in that regard (publicity on the website, listing technical problems and incidents disrupting the meeting in the minutes of the meeting, etc).3
The Act does not change the fact that the articles of association may authorize (expressly) any shareholder or member, as the case may be, to vote remotely before the general meeting held by electronic means, in accordance with the terms and conditions set forth in the articles of association. Where the company or an association authorizes distance voting, it must be able to control the capacity and identity of the shareholders or members participating in the meeting in the manner defined in the articles of association.
Finally, as was already provided for under the Companies and Associations Code, the members of the bureau of general meetings must be physically present at said general meetings, even in the case of meetings which can be attended by the shareholders or the members by electronic means4, since the members of the bureau must verify that the meeting is validly constituted and sign the minutes of the meeting.
Which means of electronic communication could be used in practice?
Remote participation should not necessarily involve sophisticated electronic means of communication with formal controlled access. The verification of the capacity and identity of the shareholders or the members, as the case may be, can also be carried out by video or teleconference systems such as Teams, Zoom, Skype or similar systems. The chosen mode of communication also depends on the circumstances. For example, in an entity where the number of shareholders or members is limited and everyone knows each other well, the meeting could be done by telephone conference.
Ability of the general meeting of national or international non-profit associations based in Belgium to adopt decisions in writing
The Act amended the Companies and Association Code by expressly providing that the members of national or international non-profit associations based in Belgium may take, by written resolutions, all decisions that fall within the powers of the general meeting, with the exception of the amendments to the articles of association, provided that these written resolutions are adopted unanimously.
In such a case, as for companies, there is no need to comply with convening formalities. The members of the management and, where applicable, the statutory auditor may, at their request, have access to these decisions thereafter.
Date of entry into force
The Act was published on 24 December 2020 in the Belgian Official Gazette and came into force on the same date.