The impact of the spread of coronavirus (COVID-19) is being felt across the world, not only affecting the health of those contracting the virus, but causing disruption to daily life for the population at large by restricting travel and limiting social and other gatherings. Company directors and secretaries are well advised to modify their usual planning for their company’s annual general meeting (“AGM”) in light of the threat posed by the evolving COVID-19 situation.
Setting the Scene: AGMs in the Ordinary Course
A company must hold an AGM once in each year, and not more than 15 months may elapse between the holding of two AGMs. A newly incorporated company must hold its first AGM within 18 months.
Notice Periods and Impact of Coronavirus (COVID-19)
An AGM may only be validly convened on a minimum 21 clear days’ notice to those entitled to receive it. Given this long lead-time and the evolving situation around coronavirus, company directors may have to react quickly to reduce the risk to those travelling or gathering to attend the company’s AGM.
We have not yet given notice to the members of an upcoming general meeting. What steps can we take?
If your company has not yet issued notice of an upcoming general meeting, there are a number of steps available to directors and secretaries.
In the case of an AGM, the directors may wish to consider dispensing with holding a “physical” (or “in-person”) AGM. Single-member companies and LTD companies may dispense with the requirement to hold an AGM in any year where, before the latest date for the holding of that meeting, all members entitled to attend and vote at the AGM sign a unanimous written resolution approving the business of the AGM.
If holding a “physical” AGM is the preferred option, other approaches are available to limit the risk to those attending:
- Notice: It may be prudent for any notice of an AGM to include a reference to the potential change of time, date or venue of the general meeting because of the spread of coronavirus, and to set out how this will be communicated to attendees.
- Proxies: A member may appoint another person (who may or may not themselves be a member of the company) to attend and vote at AGMs as their proxy. Directors should consider if members can consolidate their attendance and voting at AGMs into as few people as possible (having regard to relevant quorum provisions) through proxies.
- Location of AGMs and use of Technology: Subject to certain conditions, AGMs may be held inside or outside the State. Directors should:
- follow the advice of local health authorities (in Ireland, the Health Services Executive and the Health Protection Surveillance Centre), national governments and international organisations monitoring the spread of COVID-19, and be mindful of their advice when selecting a location for the AGM;
- consider if convening the general meeting outside the State and enabling members in Ireland to participate electronically is an option open to the company;
- consider if holding the meeting in two or more venues linked by technology (using a proxy in each location) is an option for their company;
- have regard to potential tax implications for the company, if holding its AGM in a different jurisdiction.
We have given notice of an upcoming general meeting. Can we cancel our AGM?
Should the spread of coronavirus between the date of the issue of the notice of general meeting and the date of a general meeting itself require changes to a validly convened general meeting, the company has some (albeit more limited) options.
Unless the constitution of a company provides otherwise, the directors have no inherent power to postpone a general meeting.
It may be necessary for the general meeting to be adjourned. Any power to adjourn the meeting resides with the meeting itself; that is, it is only by validly commencing the meeting that the meeting can then be immediately adjourned. Directors can liaise with members in advance of the meeting (notwithstanding that the notice has been issued) in order to canvass the requirement for the meeting to be adjourned based on the advice available to them in relation to COVID-19. This is recommended practice.
Any adjournment of a general meeting must be in accordance with the Company’s constitution. A general meeting may also be adjourned indefinitely, which may be an option should the spread of COVID-19 worsen.
Extraordinary General Meetings/Resolutions in Writing
Similar concerns arise for companies in respect of general meetings for any purpose which is not the AGM i.e. extraordinary general meetings (“EGMs”). Subject to certain limitations, it is possible for most company types to approve resolutions normally approved at EGM by written resolution instead.