How to Hold Meetings and Pass Resolutions Online

Corporate Measures Related to Covid-19:

The Royal Decree-Law 8/2020 of 17 March, on urgent and extraordinary measures to address the economic and social impact of COVID-19, includes, among its flexibility measures, a series of extraordinary measures applicable to companies, associations and foundations (Art. 40 RD-L 8/2020) during the state of emergency period, even where the articles of association made no provision for them.

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HOW TO HOLD MEETINGS AND ADOPT RESOLUTIONS ONLINE:

Two important practical measures have been adopted regarding the holding of meetings and adoption of resolutions:

• Meetings of governing and management bodies may be held by videoconference, provided the system ensures authenticity and real-time bilateral or multilateral connection with audio and video for all remote participants.

• Resolutions of governing and management bodies may be adopted by written vote without a formal meeting, at the decision of the Chair, and must be adopted in this way when requested by at least two members of the body.

In both cases, the meeting shall be deemed to have taken place at the company's registered office.

DO YOU NEED advice TO HOLD AN ONLINE GENERAL MEETING?

DEADLINE FOR PREPARING ANNUAL ACCOUNTS IN THE CONTEXT OF COVID-19:

Under current legislation, the governing or management body has a statutory period of three months from the close of the financial year to prepare the annual accounts, a deadline that falls on 31 March for companies whose financial year ends on 31 December. Under RD-Law 8/2020, this period is suspended until the state of emergency ends, after which it resumes for a further three months from that date.

Where a company is subject to a mandatory statutory audit, and the governing or management body had already prepared the accounts for the previous financial year before the state of emergency was declared, the period for the auditor's verification of those accounts shall be extended by two months from the end of the state of emergency.

This suspension of the three-month period for preparing the annual accounts also affects the statutory deadline within which the general shareholders' meeting must meet. Under current legislation, the ordinary general shareholders' meeting, having been duly convened for this purpose, must meet within the first six months of each financial year to, where applicable, approve the accounts for the previous financial year and the management report. This means that for companies whose financial year ends on 31 December, the deadline falls on 30 June.  Under RD-Law 8/2020, this deadline is extended: the ordinary general meeting must now be held within the three months following the expiry of the period for preparing the annual accounts.

If the notice of the general shareholders' meeting had been published before the declaration of the state of emergency but the meeting date fell after that declaration, the management body may modify the scheduled venue and time, or revoke the notice altogether. In the latter case, a new notice must be issued within one month of the date on which the state of emergency ended.

Furthermore, Royal Decree-Law 8/2020 provides that where the general shareholders' meeting is required to be held in the presence of a notary, having been called upon to take the minutes of the meeting, the notary may use real-time remote communication means that adequately ensure compliance with notarial duties.

Obligation to convene a general meeting and liability during the state of emergency:

Royal Decree-Law 8/2020 also introduces important measures modifying the timeframe and the liability of company directors where a legal or statutory ground for dissolution of the company arises.

• Timeframe: Under the Spanish Companies Act, directors have a duty to convene the general shareholders' meeting within a two-month period from the moment they become aware that any ground for dissolution has arisen, so that a resolution to dissolve the company, or, where applicable, to remedy that ground, may be adopted.

Royal Decree-Law 8/2020 provides that where a legal or statutory ground for dissolution arises either before or during the state of emergency, the statutory time limit for convening such a meeting is suspended until the state of emergency comes to an end.

• Liability: The Spanish Companies Act establishes that where the obligation to convene the shareholders' meeting described above is not met, directors are jointly and severally liable for the company's debts arising after the occurrence of the legal ground for dissolution.

Royal Decree-Law 8/2020, in favour of directors, modifies the above liability by providing that if the legal or statutory ground for dissolution arose during the state of emergency, directors shall not be liable for the company's debts incurred during that period.