The Royal Decree number 4 of 9 April 2020, containing various provisions on co-ownership and company and association law in the context of the fight against the Covid-19 pandemic (“Royal Decree”) clarifies that under all circumstances the management body can decide by unanimous written resolutions (see option 2). The management body can also deliberate and decide (by majority, where appropriate) by means of electronic communication which allows for discussion (see option 1).
Option 1: Board meeting via (electronic) means of communication
Although this is not explicitly provided for by law, it is generally accepted that, insofar as the articles of association do not prohibit this, the members of the management body may participate in a board meeting by (electronic) means of communication (skype meeting, conference call, etc.). As is the case for a physical meeting, the formalities for convening the meeting must be complied with unless all directors would waive. The fact that the board meeting is held by (electronic) means of communication (deliberation and voting) does not affect the obligation to take minutes.
Option 2: Written decision-making
With the exception of decisions for which the articles of association explicitly exclude this possibility, the decisions of a collegial management body may be taken by unanimous written resolutions of all directors. The Companies and Associations Code ("CAC") only requires unanimous agreement of the directors. The formalities for convening the board meeting do not have to be fulfilled and the meeting is deemed to have taken place on the date on which the last director signed the minutes. Until before the entry into force of the CAC, this possibility was only expressly provided for the NV/SA (public limited liability company) if it was permitted under the articles of association and in case of urgent necessity and when the interests of the company so required. In any event, the management body could not use this procedure for the approval of the annual accounts. The CAC has lifted this prohibition and has expressly extended the possibility of written decision-making within a collegial board of directors to the CV (cooperative company) and the BV (private limited liability company).
The date on which companies must submit their annual accounts to the general meeting is stated in their articles of association. Legally, the annual accounts of companies must be submitted to the general meeting at the latest within the first six (6) months after closing of the financial year. If the annual accounts cannot be completed on time, the management body must nevertheless convene the annual general meeting on the date stipulated in the articles of association.
The management body may then decide at the general meeting to postpone the approval of the annual accounts by a maximum of three (3) weeks. Unless the general meeting decides otherwise, this does not render the other decisions taken at the general meeting invalid.
The general meeting itself may also decide to postpone the approval of the annual accounts (and possibly the resolutions on the other items on the agenda) until a later date (whereby the period of postponement may be longer than three (3) weeks).
In that case, the management body will re-convene the general meeting at a later date. In such a situation, it is recommended that the general meeting grants a special discharge to the directors specifically in respect of the non-timely presentation of the annual accounts.
However, the Royal Decree provides that the annual shareholders’ meeting can be postponed by ten (10) weeks after the most legally permitted date (see more below).
The Minister of Justice, Koen Geens, announced on Sunday, 29 March 2020, a facilitation of the conditions for holding annual general meetings.
The Royal Decree in this regard was published on 9 April 2020, in the Belgian State Gazette (as amended by the Royal Decree of 28 April 2020) and provides for meetings which are / will be convened between 1 March 2020 and 30 June 2020 and that have not yet been held, in the following possibilities, even if the articles of association actually do not permit this:
- The general meeting can take place on the statutory date, but in circumstances that are, on the one hand, compatible with the measures taken in response to the COVID-19 crisis and, on the other hand, still allow shareholders and members to exercise their voting rights and give them the opportunity to ask questions. Specifically, the management body will have the power to decide that the shareholders or members may only vote remotely, whether or not in combination with proxy voting. The forms for remote voting and proxies are delivered to the company at the address indicated, if necessary only electronically (a scanned or photographed version is sufficient). The management body may decide that proxies are given to a specific person (i.e., for example, a single proxy holder), provided that the proxies contain specific voting instructions for all proposed resolutions (see option 3 below), or
- General meetings can be held by telephone or video conference (whether or not combined with e-mail for exchange of written documents) or in writing (possibly supported by telephone or video conference) on the date provided (see options 1 and 2 below), or
- General meetings can be postponed by ten (10) weeks after the most legally permitted date (this is also permitted if the meeting has already been convened). If a company closed its financial year on 31 December 2019, the deadline is 30 June 2020, which means that the annual meeting can be postponed until 8 September 2020. The approved annual accounts must then be filed with the National Bank of Belgium no later than 8 October 2020.
By way of clarification, a general meeting convened between 1 March 2020 and 30 June 2020 may be held in accordance with the above options, even if it is held after that date.
Option 1: Meeting via telephone or videoconference
Shareholders can participate in the general meeting by remote telephone or video conference and vote (Skype meeting, conference call, etc.), combined with e-mail, for example, for the exchange of written documents.
Although this is not provided for in the BCAC, the Royal Decree now states that general meetings via video or telephone conferences are always possible for companies / associations where shareholders know and can identify each other. In accordance with the general principles of deliberation, it is required that the means of communication must at least enable shareholders / members to have direct, simultaneous and uninterrupted knowledge of the discussions during the meeting, to be able to speak and to exercise their voting rights with regard to all matters to be discussed by the meeting. What the Royal Decree now states, however, is not expressly enshrined in law and, moreover, the Legislator has previously always stated that a physical meeting of the general meeting is mandatory. Moreover, with the exception of the written general meeting, the general meeting must always take place at the place indicated in the articles of association. In order to avoid any discussion, it is therefore advisable that all parties involved expressly agree to hold a general meeting via telecommunication means and waive any claim for annulment of the decisions of the general meeting.
Option 2: Written general meeting
Unless the articles of association exclude this possibility, the resolutions of the general meeting may be adopted by unanimous written resolutions. The only condition set by the CAC is that all shareholders unanimously agree. In that case, the formalities for convening the meeting do not have to be complied with. Unless the articles of association provide otherwise, the annual meeting is deemed to have taken place on the date on which the last shareholder signed the resolutions. The directors and the statutory auditor, as well as the holders of convertible bonds, subscription rights or certificates issued with the cooperation of the company, may take knowledge of the resolutions at their request.
Option 3: Proxies
Unless the articles of association preclude [or limit] this, it is also possible for shareholders to limit the number of persons physically present at a general meeting through the use of proxies.
In accordance with the Royal Decree of 9 April 2020, the management body can now impose that the power of attorney must be given to a person designated by it. In that case, the proxy must contain specific voting instructions. If a proxy has already been received in which a shareholder or member had appointed another proxy holder, the votes or abstentions will still be taken into account, provided that the proxy contains specific voting instructions, and without this other proxy holder having to be present at the meeting.
Option 4: Remote voting prior to the general meeting
If permitted by the articles of association, the company may also offer shareholders the option of voting remotely by letter before the general meeting. The company will make a voting form available for this purpose. The voting form must contain not only the agenda of the meeting, but also the proposed resolutions.
If provided for in the articles of association, shareholders can also cast their votes electronically before the general meeting (e.g. via a website). However, this is again subject to the requirement that the company must be able to verify the capacity and identity of the shareholder.
Written resolutions (administrative body/general meeting):
The unanimous written decisions of the board of directors and the general meeting must be signed by all directors or shareholders respectively:
- or one copy of the written resolutions can be circulated and the directors/shareholders place their signatures on the same document;
- or the directors/shareholders place their signatures on several identical copies. The written resolutions are then made up of the various signed copies.
It should be remembered that under the CCA it is also possible to work with an electronic signature.
Remote meeting minutes (board of directors/general meeting):
Unless the articles of association provide otherwise, the minutes of the remote meeting of the management body are signed by the chairman and the directors who request so. To this end, the chairman may sign a physical version of the minutes or sign the minutes electronically. For the other directors who took part in the meeting, electronic signing appears to be the most appropriate option.
Unless the articles of association provide otherwise, the minutes of a general meeting held remotely shall be signed by the members of the bureau, who must be physically present, and the shareholders who request so. The shareholder who is not physically present may remotely sign the minutes electronically.
The annual general meeting must approve the annual accounts within six (6) months after the closing of the financial year. Subsequently, the annual accounts must be filed with the National Bank of Belgium within thirty (30) days after approval, i.e., no later than seven (7) months after the closing of the financial year. In the event of late filing of the annual accounts, the National Bank of Belgium charges a surcharge from the first day of the ninth month following the closing of the financial year. Taking this into account, the deadline for the approval and filing of the annual accounts is the day before the first day of the ninth month following the closing of the financial year (in order to avoid the tariff surcharge imposed by the National Bank of Belgium). It should be noted that the late filing of the annual accounts with the National Bank of Belgium is a violation of company law and endangers the directors' liability towards the company and third parties. In this case, directors can be protected with respect to the company by the shareholders of the company who, during their annual general meeting, provide a special discharge for the directors due to the fact that the annual general meeting was not held on the statutory date.
The Royal Decree of 9 April 2020, provides that the annual meeting may be postponed ten (10) weeks after the most legally permitted date. As indicated above, this means that if a company closed its financial year on 31 December 2019, the ultimate legal date is 30 June 2020. The annual meeting should therefore be held on 8 September 2020 at the latest. The approved annual accounts must then be filed with the National Bank of Belgium no later than 8 October 2020. Branches of foreign legal persons are also granted a postponement to deposit the documents of their mother company.
On the date of this publication, the administration has not (yet) notified that there is an administrative tolerance with respect to the non-compliance with the aforementioned deadlines.
However, the administration has granted the taxpayers an additional period until 30 April 2020 midnight to file their corporate income tax, legal entities tax and non-resident tax returns. This extension only applies to returns with a filing deadline of 16 March to 30 April 2020.
More questions on this topic? Contact our corporate legal specialists:
- Karen Keuleers, Partner, BDO Antwerp
- Steven Strobbe, Partner, BDO Gent
- Didier Leclerq, Partner, BDO La Hulpe
- Anne-Charlotte Lelièvre, Manager, BDO Namur
- Nathalie Schynts, Manager, BDO Liège
- Ann De Wilde, Senior Advisor, BDO Gent
- Annemie Wittemans, Advisor, BDO Antwerp
- Jean-Philippe Weicker, Advisor, BDO Namur