Effective as of 1 June 2021, Government Decree no. 502/2020 (the Decree) on personal and property joint ventures was amended, providing additional opportunities for the public limited companies to hold the General Meetings during the state of emergency.
According to the amended legal provisions, public limited companies can now hold their General Meetings with physical presence of their shareholders, taking into consideration the headcount limits set by the epidemiological restrictions in force. The Companies can also hold their General Meetings by using electronic means of communication, even if not specifically provided for in its statutes, but in compliance with the special provisions of the Decree. The above two alternatives for convening a General Meeting can be combined, especially in the case when the epidemic restrictions in force do not allow to hold a General Meeting with the full number of shareholders.
According to the Decree, if the convening of the General Meeting has already been initiated by 31 May, the General Meeting or the meeting of the decision-making body shall be held in accordance with the rules of the Decree in force until 31 May, and the time limits specified by the regulation (e.g. for reconvening the General Meeting) shall be counted from the date of the resolution made at that Meeting.
The right for convocation of the General Meeting for the subsequent approval of resolutions passed by the decision-making body of the company under the Decree before 1 June 2021 is ensured for shareholders who hold at least 1% of the voting rights (one shareholder alone or more shareholders together) and are already registered in the Company Registrar through the shareholder’s identification carried out in connection with the General Meeting organized under the Decree. The shareholders are entitled to request the re-convocation of the General Meeting within 30 days starting from 1 June 2021.
If the General Meeting is not re-convened for the purpose of the post-approval of the resolutions on the annual reports and the usage of the profit after tax, the dividend may be paid and the resolutions on the annual reports and the profit after tax usage may not be put on the agenda of the next General Meeting. If a General Meeting is re-convened for the same reason, the dividend can only be paid if the annual reports and the dividend payment are approved by the re-convened General Meeting.
In case the General Meeting is re-convened to approve the amendments made to the statutes before 1 June 2021, the amendment to the statutes shall expire on the day after the new General Meeting, in case the reconvened General Meeting does not approve it.
Provided the financial year of a public limited company is different from the calendar year, no extraordinary General Meeting need to be convened for the ex-post approval of decisions taken during the emergency period, provided that the period between 1 June and the first day of the fourth month following the balance sheet date of the different financial year is less than 180 days. In this case, if the shareholders have requested a re-approval, the resolutions adopted during the emergency period shall be put on the agenda of the next General Meeting.
Impact on investors: Clients should take note that due to the official prolongation by the Government of the state of emergency, intermediaries and investors cannot follow the usual General Meeting related procedures. General Meetings with physical presence and/or via electronic means of communication are now allowed with some limitations. Investors will be notified in detail about the specific rules of the General Meeting case by case, when issuers will publish their procedures aligned with the Decree.