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Corporate law perspective on corona
When should we hold our annual shareholders' meeting this year?
The shareholders' meeting of a stock corporation must be held each year within eight months as of the end of the financial year. Therefore, if the financial year corresponds to the calendar year, there is time until the end of August. If possible, we would therefore recommend holding the annual shareholders' meeting a bit later this year in order to be better prepared.
We would like to hold the annual shareholders' meeting in the coming weeks. What options are there to make it easier to hold an annual shareholders' meeting?
In general, the following points should be taken into consideration when preparing for shareholders' meetings to be held this year:
- Check an alternative date.
- Plan precautions to protect the participants, such as hygiene measures.
- Prepare Q&A's on current issues relating to COVID-19 that you will publish on your website in advance, such as precautions you have taken to protect the shareholders.
- Check the legal, technical and personnel requirements for (extended) online participation in the annual shareholders' meeting.
- Prepare a plan to be able to react to unexpected situations spontaneously. This may concern a short-term absence of the board members or the notary public at the shareholders' meeting or the occurrence of symptoms of illness of any of the participants during the shareholders' meeting.
- There are registrations with the commercial register, which are constitutive, i.e. their registration is a prerequisite for their effectiveness, such as changes to the articles of association, capital increase or merger.
- However, there are also registrations with the commercial register, which are merely declarative, i.e. their registration is not a prerequisite for their effectiveness, such as submission of annual financial statements, change of managing director or change of shareholder. With respect to limited liability companies, the shareholder registered as shareholder with the commercial register is considered as shareholder of such company. However, the company can admit the new shareholder, e.g. to shareholders' meetings, even before such date. However, this may be relevant in the case of a dispute between shareholders. Delayed registration can also be an issue in the case of a change of managing director, in particular in the context of a dispute. Facts which are subject to registration (such as the deletion of a managing director) and which are not registered cannot be invoked against a third party; i.e. if a managing director has been dismissed but his dismissal has not yet been registered with the commercial register, he could still conclude contracts for the limited liability company - assuming the good faith of the contractual partner. However, in doing so he makes himself liable for damages.