18 March, 2020

Covid-19 emergency measures: New rules for remote shareholders’ meetings and extension of the term to approve the yearly financial statements

The emergency measures against COVID-19 also apply to the corporate framework.

First, under the Italian law the shareholders’ meeting for the approval of annual financial statements must be convened within 120 days from the last day of the year to which the statements refer (which, for most companies, is December 31). For Italian companies with listed shares the shareholders’ meeting is also subject to a 30 day prior notice requirement (which is extended to 40 days if the appointment of a new board of directors or statutory auditors is in the agenda for the meeting).

Prior to the recent measures, the 120 day period could be extended to 180 days subject to the occurrence of at least one of the following circumstances: (i) the company is required to prepare consolidated financial statements or (ii) particular situations relating to the structure or purpose of the company occur. 

However, the Italian Government considers that the current Covid-19 could be treated as “force majeure” and therefore justifies an extension for all companies to approve their Financial Statement within 180 days.

Second, the Maxima No. 187, of March 11, 2020, of the Milan Notary’s Council allows that the shareholders’ meetings (and the boards of directors) of the companies take place even if all the attendees are connected by audio or video conference and, therefore, even if the chairman and the secretary of the meeting are not in the same place. The Maxima has been confirmed by Legislative Decree of March, 11, 2020, n. 18 (“Decreto Cura Italia”), where is specified that the shareholders’ meetings of the companies (as well as the boards of directors) may also be regularly held if the chairman, the secretary and, if required, the notary public, as well as all the attendees at the meeting, are connected by means of telecommunications that can guarantee their identification and participation (right to participate, expression of voting rights, etc.). The provision also applies where the company’s by-laws (i) do not regulate the conduct of the meeting by means of telecommunications, or (ii) condition the validity of meetings by audio or videoconference to the fact that the chairman and the secretary of the meeting are in the same place. The rule applies to shareholders’ meetings (or boards of directors) convened by July 31, 2020, or by the date, if later, until the state of emergency on the national territory related to the COVID-19 epidemic. The measures, while on the one hand promote and encourage participation in meetings at a distance and discourage travel that is not justified by necessity, on the other hand allow an easier management of meetings, which translates into a significant advantage for both resident and foreign shareholders and directors, who will under no circumstances be obliged to expose themselves to any risk at this particularly critical time.

 

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