What was introduced due to the pandemic has proven to be a tried-and-tested measure over the past two years: The ability to hold virtual general and members' meetings.
The virtual Annual General Meeting is to be given a permanent, further developed regulation in the German Stock Corporation Act (AktG) and virtual general meetings should also continue to be possible for associations.
Virtual general meetings for associations
Just like public limited companies, associations should also be able to hold their general meetings as video conferences in future. The the Federal Council proposes in which Draft law from 1 July 2022 before.
By amending Section 32 of the German Civil Code (BGB), it should be possible in principle to hold meetings as video conferences and not be dependent on a provision in the articles of association. "Since digital discussions and meetings have proven their worth during the coronavirus pandemic, the holding of a meeting in which association members can participate by means of video conferencing technology should in future be at the dutiful discretion of the board of directors. This no longer requires a provision in the articles of association or the consent of the members," explains the Federal Council.
Virtual general meetings for stock corporations
Section 1 (2) of the Act on Measures in Corporate, Cooperative, Association, Foundation and Residential Property Law to Combat the Effects of the COVID-19 Pandemic (GesRua-COVBekG) gave stock corporations and related legal forms the opportunity to hold their Annual General Meetings as exclusively virtual Annual General Meetings for the first time. This GesRuaCOVBekG will expire at the end of 31 August 2022.
The format of the virtual Annual General Meeting was well received in practice and has generally proved its worth:
- Attendance at the meetings increased
- The possibility of shifting the right to ask questions to the run-up to the meeting contributed to an increase in the quality of the answers to shareholders' questions.
However, the law does not allow shareholders to exercise their rights to the same extent as is possible in the context of physical or hybrid meetings.
In light of this experience, the virtual Annual General Meeting is to be given a permanent, further developed regulation in the German Stock Corporation Act (AktG). However, it is now also intended to organise the exercise of rights by shareholders in a similar way to the right to attend a meeting in person.
It states that the articles of association may provide for the meeting to be held without the physical presence of shareholders. The following requirements must be met:
- Transmission with image and sound
- Exercise of voting rights via electronic participation, electronic postal vote or authorisation
- Shareholders connected digitally are granted the right to submit motions and election proposals at the meeting via video communication
- Shareholders are granted a right to information via electronic communication,
- The content must be made available to them 7 days before the meeting,
- Shareholders must be able to submit a statement electronically,
- they must be given the right to speak (!) in the video communication
- and a right of objection by electronic means.
Conclusion
Virtual general and members' meetings are here to stay. Following the positive experiences of the last two years of the pandemic, the advancement of digitalisation and the possibility of making meetings more flexible and sustainable at the same time, the legislator has now also decided on a permanent solution for virtual meetings.
