Is it possible to hold general meetings now also in digital form?

25.03.2020

Although compulsory presence has been controversially discussed for a long time and had already been handled differently in other countries, it has not yet been possible in Germany to date.

Due to the current ban on holding meetings, the obligation to attend general meetings is now set to be relaxed with the intention of making general meetings quorate even as virtual meetings. Consequently, advance dividends would then be possible despite the ban on meetings.

On March 23, 2020, the federal government presented an appropriate draft law, after numerous listed companies had already rescheduled their annual general meetings, which would originally have been held in the usual 2020 annual general meeting season. This draft law has now been adopted unchanged by the Federal Government on March 25, 2020.

According to these amendments, companies would be permitted to hold general meetings online without having to change their articles of association. In addition, notification periods for convening the meetings would be reduced from 30 days to 21. Additionally, it would be possible to hold general meetings throughout the entire fiscal year instead of only in the first eight months. The executive board would also be able to make advance payments on the net profit for the year even without relevant provisions in the articles of association.

These amendments are generally viewed positively by the market. Despite initial criticism, both companies and shareholder protection associations are welcoming the initiative, even if the issue of “limiting the rights to speak and to ask questions” is not welcomed by all. Since the intended amendments are currently supposed to apply to the 2020 general meetings only, there will be sufficient time for discussion after the current situation. At least the impetus for virtual general meetings beyond the corona crisis has been provided.

Status: March 25, 2020.

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