In the context in which the authorities imposed measures that gradually restricted the movement of persons and limited the possibility of carrying out actions involving the reunion of groups of people, it became difficult to organize general meetings of shareholders / associates or collegiate governing and management bodies.
Even in the conditions in which the state of emergency will be lifted from 15 May, the recommendations are already in the sense that the restrictions on social distancing should continue to be observed.
The Government thus came to help the companies that did not provide by their articles of association the possibility to hold general meetings by correspondence and encourages the companies regulated by the Companies Law no. 31/1990 to use alternative legal means in order to be able to continue and adapt their operation to the new reality.
In this sense, the Emergency Ordinance no. 62/2020 for the adoption of measures in the field of companies, with a view to the meetings of the statutory bodies (“GEO”), published on 8 May 2020, includes temporary aspects of novelty that allow the adoption of rapid measures by the company bodies, the physical presence of their members not being required.
- Methods of Convening General Meetings
According to the GEO, the general meetings of shareholders / associates can be convened by:
a) the existing legal modalities provided by art. 117 para. (3) of the Companies Law: publication of the call in the Official Gazette and in a widely circulated newspaper; or through
b) any means of distance communication, which ensures the transmission of the text, provided that each shareholder / associate communicates / has communicated in writing to the directors / board of directors / directorate the postal address or, as the case may be, the e-mail address, the number of telefax or other coordinates at which it can receive the correspondence with the company.
The novelty is that the statutory body that has the power to convene the general meeting will decide which is the most appropriate way to convene, having at hand the possibility to combine the above convening methods, regardless of the provisions of the articles of association.
Of course, there is still nothing to stop the shareholders / associations from unanimously renouncing the formalities provided for the convening of general meetings.
- Conduct of General Meetings
Even if the articles of association prohibit or do not provide for the possibility of holding general meetings by correspondence or by electronic means of direct distance communication, the statutory body competent to convene the general meeting may decide to hold them by one of the meeting methods regulated by the GEO.
Conducting meetings by mail means that the participants are not physically in the same place and cannot communicate directly and in real time with other shareholders / associates and participants in the meeting. On the other hand, if the participants can discuss in real time in the meeting, even if they are not physically in the same place, the meeting is not considered to be conducted by correspondence, but is a direct, remote communication.
a) General Meetings Held Exclusively by Correspondence
In this scenario, some rules related to the physical presence of shareholders / associates are incompatible with the manner of holding the meeting by mail. Also, the directors and members of the board of directors or, as the case may be, the members of the board of directors and those of the supervisory board or the director or directors who should normally have attended the general meeting of shareholders / associates, may not be bound by this obligation, in the case of meetings held exclusively by correspondence.
Shareholders / associates communicate their vote by mail in the manner indicated in the convocation, so that it is received by the company by the date of the meeting.
The chairman of the board of directors or the director with powers of representation or, as the case may be, the chairman of the board of directors or a representative thereof, together with a technical secretary, if possible, shall draw up and sign a report indicating, inter alia, the convening formalities according to the GEO and the decisions adopted and the number of votes cast for each voting option related to each item on the agenda that is subject to the vote and, as the case may be, the way in which the shareholders / associates voted on each agenda item.
b) General Meetings Held by Electronic Means of Direct Distance Communication
The statutory body empowered to convene the general meeting may decide to hold it by electronic means of direct distance communication, such as teleconferencing or videoconferencing, subject to the secrecy of the vote, if any, and the right to vote by correspondence.
In this way of holding the meetings, the debates keep an interactive character that allows the expression of opinions and the exchange of ideas between the participants.
Electronic means of distance communication must meet the technical requirements which are compatible with the most common fixed or mobile access technologies, with as many operating systems as possible and connect to fixed or mobile public electronic communications networks and which ensure the transmission and real-time two-way communication, so that shareholders / associates can remotely address the general meeting, participate effectively in the debate on each item on the agenda, cast their vote and be able to then check how it was voted in the assembly.
Minutes shall be drawn up at the general meeting held by electronic means of direct distance communication.
- Other Provisions
The decision of the general meeting of shareholders / associates will be prepared and signed with handwritten signature or extended electronic signature by the chairman of the board of directors or the director with powers of representation or, as the case may be, by the chairman of the board or a person authorized by them. In order to be opposable to third parties, the decisions of the general meetings of shareholders and the decisions of the general meetings of the associates amending the articles of association will be submitted to the commercial register office, to be mentioned in the register and published in the Official Gazette of Romania, part IV.
Even with the provisions of the GEO at hand, it is possible that some companies will still encounter difficulties in organizing general meetings during this period. In this regard, according to the new regulations, ordinary meetings are not required to meet within 5 months of the end of the financial year, but no later than 31 July 2020. In connection with the postponement of the date for the ordinary general meeting to approve and the annual financial statements, Emergency Ordinance no. 48/2020 on some financial-fiscal measures extended the deadline for the submission of annual financial statements for the financial year 2019, respectively of the annual accounting reports concluded on 31 December 2019, until 31 July 2020 inclusively.
Particular attention should be paid to the net asset position of the company, determined as the difference between total assets and total liabilities, as evidenced by financial statements approved by law, in particular by those companies that in the past had a net asset position of less than half of the value of the subscribed share capital, as the effects of the pandemic could have a severe impact on the net asset position. Normally, if the net assets are negative, the board of directors and the directorate must convene an extraordinary general meeting immediately in order to decide whether the company should be dissolved. According to the new GEO, until 31 July 2020, the board of directors, respectively the directorate is not bound by this convocation obligation.
Other provisions of the GEO concern the possibility of including the collective corporate bodies of administration, supervision and / or of the directorate to conduct meetings by means of direct distance communication, with the guarantee of the principle of collegiality of deliberations.
- Applying the GEO Along a Period of Time
The provisions of the GEO are also applicable to the general meetings of the associates / shareholders:
- convened during the state of emergency, but which are convened after the end of that state of emergency, as well as meetings
- convened and gathered within the first 2 months after the end of the state of emergency.
Also, the general meetings of shareholders / associates convened prior to the entry into force of this GEO, but for which the meeting is scheduled for a date subsequent to the establishment of the state of emergency may opt for the meeting by correspondence or electronic means of direct distance communication.
To the extent that, after the establishment of the state of emergency, but before the entry into force of the GEO, the shareholders / associates unanimously decided to hold general meetings and exercise the voting in one of the ways provided by the GEO, the decision thus adopted may not be annulled for non-compliance with the procedures for conducting and exercising the right to vote.
Taking into account the fact that even in the period following the end of the state of emergency, some rules of social distancing will have to be observed, but also the fact that companies must constantly and quickly adapt their business strategy, use alternatives to convene and conduct meetings of shareholders / associates and of the administrative and management bodies without the physical presence of their members, will be the option used more and more often in the company life.