How is COVID-19 Affecting Life Within The Corporate World?Published on: 03 April 2020
There is no corner of the UK which is not being affected in some way by the impacts of COVID-19, so it is not surprising that the world of corporate law is experiencing some changes.
With the UK population having been told to remain at home, except for a handful of reasons, a significant impact is being felt by companies as face to face meetings cannot be held. In order to carry on making business decisions and to make the necessary decisions to reflect the current economic climate, meetings need to happen.
It is considered by government that the attendance of shareholders at meetings will not satisfy the definition of “essential work”. Therefore, to follow these rules, alternative measures will need to be taken when meetings are held.
One way around this is to hold board meetings and shareholder meetings remotely.
Companies are being told to make clear in their notices of meetings that shareholders and/or directors may not attend in person and that they will be refused entry if they try to attend in person. The meeting should be held by a maximum of two people, if it is to be held physically at all, in order to establish a valid quorum, and then the voting is to be done by proxy or by the distribution of a written resolution. As this can be done electronically, this is the most convenient option and the option which creates the least level of disruption. Another option in these trying times, is to use video conferences in order to hold the meeting.
These rules are applicable to shareholder meetings, board meetings of directors and AGMs of public limited companies, but whichever bracket your company falls into, the process of decision making will be affected in some way.
It is best that you receive legal advice to ensure the validity of your decision making. Please contact the corporate and commercial team at Lanyon Bowdler if you wish to discuss this further.