The Coronavirus outbreak means mass gatherings should be avoided, but what about companies who already have plans in place for their annual general meetings of shareholders (AGMs)?
Is it possible to have an AGM remotely?
In July 2016 Jimmy Choo PLC became the first UK listed company to have an electronic AGM, held through a secure app, logins and links to a conferencing system. They found that attendance was up on previous years, and so remote access could prove to be a tool for increased shareholder engagement.
That sounds expensive. Can I do it another way?
There are lots of ways that a meeting can take placed that complies with company law without needing to cost a lot of money. Private companies could use Skype, conference call, mobile apps, live streaming and other online facilities. The key is that the shareholders are able to vote and speak at the meeting, and that the company can establish who is in attendance.
What does the law say about AGMs?
Section 360A of the Companies Act 2006 states that nothing in that part of the Act precludes the holding and conducting of meetings by electronic means, provided that each person is able to , provided that each person is able to exercise their right to speak and vote, by whatever means that person communicates with the meeting. There are extra requirements if the company is listed.
Do I need to change the Articles?
Not necessarily, it depends what the company’s Articles of Association already say. There does not need to be an express provision permitting virtual shareholder meetings, but you need to check that there is not anything in the Articles which prohibits it.
If the company was incorporated after 1 October 2009 then it may well have the Model Articles under the Companies Act 2006. Article 37 of these permits virtual attendance at meetings provided that those attending are able to speak and vote if they choose to do so. Article 37(4) expressly states that it is immaterial whether any two or more members of the company are in the same place as each other. This is the case for the Model Articles for companies limited by shares, and those limited by guarantee (where the provision is at Article 23).
Can the Chair have the meeting on their own?
No. Section 318 of Companies Act 2006 provides that the quorum for a shareholder meeting is two qualifying persons present at the meeting. This means you need at least two separate people engaging in the meeting, either by virtual means or in person – the Chair cannot simply get proxies from all the shareholders and have the meeting on their own.
If you have any queries, please contact Susan Perry.