Changes for private limited companies: remote meetings are possible if not explicitly prohibited

COVID-19 epidemic and the restrictions introduced to limit it, such as restrictions on mobility, gatherings and the need to reduce direct human contact to the essential minimum, have necessitated a number of legislative changes to enable functioning in the new reality.

Act of 15 September 2000, i.e. the Code of Commercial Companies and Partnerships, also included important and desirable changes from the point of view of shareholders and commercial companies’ bodies.

According to the current wording of the relevant provisions of the Code of Commercial Companies and Partnerships, participation in a shareholders’ meeting, general meeting or meetings of company bodies using electronic means of communication was possible only if such a procedure was provided for in the articles of association or the company’s statute. This meant that without a relevant regulation in the articles of association or statute, it was not possible to hold the meeting remotely. The introduction of such a possibility would require an amendment to the articles of association or statute of the company, which – in turn – meant the need to hold a shareholders’ meeting or a general meeting with the participation of a notary public, which in the current situation should be considered as difficult if not impossible.

Act of 31 March 2020 amending the act on special arrangements for preventing, counteraction and combating of COVID-19, other infectious diseases and the crisis situations caused by them, and certain other acts (hereinafter: the amending act on COVID-19) changes the approach to this matter completely.

Article 27(3) of the amending Act on COVID-19, changes, among others, the wording of Article 234[1] §1 of the Code of Commercial Companies and Partnerships, according to which participation in the meeting of shareholders may also take place by electronic means of communication unless the articles of association provide otherwise.

Therefore, unless the articles of association contain an explicit prohibition to hold a meeting using electronic means of communication, the decision to hold a meeting remotely belongs to the person convening the meeting.

According to §2 of the amended Article 234[1] of the Code of Commercial Companies and Partnerships, participation in the shareholders’ meeting by means of electronic communication includes in particular:

• real-time two-way communication of all persons participating in the shareholders’ meeting, in which they may speak in the course of the shareholders’ meeting from the location other than that of the shareholders’ meeting; and

• exercising the right to vote in person or by proxy before or during the shareholders’ meeting.

The amending Act on the COVID-19 also introduces an additional regulation, according to which detailed rules of participation in the meeting of shareholders using means of electronic communication are determined by the Supervisory Board in the form of regulations, or in its absence – by the shareholders.

The regulation may not lay down the requirements and restrictions other than those necessary to identify the shareholders and ensure the security of electronic communications.

Importantly, the regulations may be adopted by a resolution of the shareholders without holding a meeting if the shareholders representing absolute majority of votes agree in writing to their content.

How to conduct remote meeting on the basis of the amended regulations?

First, the Supervisory Board, and in companies where the Supervisory Board was not appointed – the shareholders, should adopt the regulation for conducting the meeting using means of electronic communication.

We recommend that the regulation for conducting a meeting by means of electronic communication should specify the manner of participation in the meeting, speaking during the meeting, exercising the right to vote, objecting to the adopted resolutions, as well as the manner of taking minutes of the meeting, taking into account the obligations arising from the content of Article 248 of the Code Commercial Companies and Partnerships.

Adoption of the regulations by shareholders does not require a meeting to be held, provided that their content is approved in writing by the shareholders holding shares corresponding to the absolute majority of votes at the meeting.

The meeting of shareholders using electronic means of communication shall be decided by the person convening the meeting. Information on the choice of a remote mode, together with information on the manner of participation in the meeting, speaking, exercising the voting right at the meeting and raising objections to the adopted resolutions should be included in the notice on convening the meeting, prepared and announced to shareholders in the manner provided for in the articles of association. It seems reasonable that if the above matters are set out in detail in the regulations for holding a meeting by electronic means of communication, it will be sufficient to include a reference to the relevant provisions of the regulations in the notice.

Shareholders are free to choose the means of electronic communication to be used for meetings, taking into account the need to ensure the identification of participants in the meeting and the security of communication. It therefore seems reasonable to argue that such a meeting should take place in the form of a video conference (to enable the identification of its participants), using tools such as Skype, Zoom or others.

The discussed changes concern both limited liability companies and joint stock companies (see: Article 27(7) of the amending Act on COVID-19, amending Article 406[5] of the Code Commercial Companies and Partnerships).

Importantly, an analogous regulation enabling remote meetings in the situation where this possibility was not explicitly excluded in the articles of association was also introduced for the meetings of the Supervisory Board and the Management Board (see: Article 27(1)(2)(5)(6) of the amending Act on COVID-19).

The regulation of the amending act on COVID-19 discussed above entered into force on 1 April 2020, with the exception of amended Article 406[5] § 5–7, which enters into force on 3 September 2020.

Prepared by:

Ewa Lejman-Widz, partner, attorney-at-law, tax adviser, Izabella Żyglicka i Wspólnicy

Kamila Spalińska, trainee attorney-at-law, Izabella Żyglicka i Wspólnicy

Revised: 2 April 2020