Coronavirus and possible adaptation of the methods of deliberations

It is almost impossible to hold a physical meeting currently in France. An important topic for most of the companies whose corporate bodies need to meet in person, failing which the related decisions are null and void. In particular in this period of the year when annual financial statements need to be authorised and soon approved.

This issue is about to be solved by the beginning of the week starting 23 March. French government intends to extend the use of other means (videoconferencing or means of telecommunication or written consultation) even if the law or the articles of association of the entities concerned provide otherwise.

These rules would enter into force retroactively (probably on 14 march) and until 31 July, unless this date is further extended.

In the current global context of the coronavirus epidemic (covid-19) and the fight against its spread, and taking into account, particularly in France, decisions aimed at confining the population, the government is currently considering adapting the procedures for the holding of general meetings and boards of directors and supervisory boards of corporate entities (including limited liability companies, EIG (economic interest grouping), EEIG, cooperatives and insurance companies) in order to enable their bodies to deliberate validly and to ensure the continuity of their operations. The texts should be approved rapidly (probably early in the week starting 23 March, according to our understanding).

With regard to general meetings, it would be envisaged to exceptionally authorize companies to hold their meetings without the physical presence of the partners/shareholders. This measure, if taken, would allow the meetings to deliberate and not have to be adjourned. Of course, in such a case, shareholders/partners would continue to be able to fully exercise their rights (in particular the right to vote, to ask written questions and/or to propose the inclusion of draft resolutions on the agenda) under the conditions provided for by the applicable laws and regulations.

In order to encourage the participation and voting of shareholders/partners, it would also be planned to extend the use of alternative methods of deliberation (videoconferencing or means of telecommunication or written consultation), in companies for which these alternative means of deliberation are already provided for by law, by removing the requirement that a clause in the articles of association must authorize it, or, for companies for which the use of videoconferencing or telecommunication means are not yet authorized, by extending it to these companies, provided that these means can guarantee the integrity of the deliberations as required by the law. Thus, provided that they have adequate technical means, all these companies would be entitled to use these alternative methods of deliberation.

With regard to the boards of directors or supervisory boards, in order to enable them to continue to carry out their mission (and in particular during this period to approve or examine, as the case may be, the annual financial statements, which has per the law needs to be performed by means of a physical meeting), it is planned to extend and make more flexible the use of videoconferencing and telecommunication means to hold the meetings. As per the general meetings, these means must guarantee the integrity of the deliberations as required by the law.

In order to allow all general meetings (a significant number of which must be held before 30 June 2020) and meetings of boards of directors and supervisory boards to be held under satisfactory conditions of legal certainty, these provisions could be applicable retroactively (probably from the date on which the ban on meetings of more than 100 people came into force (14 March) and until a date allowing general meetings to be held to approve the financial statements (currently set at 31 July 2020). The period of application of these exceptional provisions could be extended, depending on the health situation, without exceeding a deadline currently set at 30 November 2020.

See our Coronavirus (COVID-19) feature for more information generally on the possible legal implications of COVID-19.