New Royal Decree containing various provisions on corporations and associations in the context of the fight against the Covid-19 pandemic

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EY Belgium Tax

12 Apr 2020
Subject Tax alert
Categories Covid-19
Jurisdictions Belgium

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Shareholders’ meetings

In principle, the general shareholders’ meeting is held as a physical meeting at the registered office of the company or association. Because of the Covid-19 measures, physical meetings must be avoided or have become impossible.

Currently, the Companies and Associations Code offers several possibilities for shareholders to avoid their physical presence, but these special procedures can not be applied by all legal entities. The articles of association also often contain deviating provisions.

The legislator has therefore issued a new Royal Decree on April 9, 2020 (“RD”), to provide more flexibility regarding the organization of general shareholders’ meetings (as well as board meetings).

Briefly stated, the legislator has provided two options. On the one hand, the general meeting can be held without physical presence. On the other hand, general meeting can be postponed to a later date. This applies not only to annual meetings, but also to special and extraordinary meetings.

Option 1: General meeting without physical presence

The board can, before the general meeting is held and regardles of a statutory authorization, oblige the participants of the general meeting:

  • to vote via a voting form which is made available by the board or which is available via a website;
  • to grant a proxy with voting instructions to a proxy holder to be appointed by the board

The board must simultaneously offer both options to the participants of the general meeting.

If a proxy is granted, the board can appoint a proxy holder. This proxy must contain voting instructions for each point on the agenda and the proxy holder must take these instructions into account.

Voting forms and proxies must reach the listed company at the latest on the fourth day preceding the day of the general meeting. Non-listed entities may also require that these documents reach them before this deadline. There are no mandatory formalities prescribed. A scanned or photographed copy of the completed and signed documents can be sent by e-mail or in attachment to an e-mail.

The board may order participants to the general meeting to send their questions in writing. The board may also require that the questions must be submitted no later than the fourth day preceding the day of the general meeting.

These written questions will be answered in writing at the latest on the day of the general meeting (but before the vote) or orally if the general meeting is held by telephone or video conference.

The answers to these written questions should be notified in a reasonable way. Listed companies publish the answers on their website.

Members of the bureau, members of the board, the statutory auditor and the proxy holder may hold the general meeting by telephone or video conference. If the social distancing rules can be taken into account, they also have the option to meet physically.

In case certain decisions must be adopted by an authentic deed, the physical appearance of one proxy holder or director duly authorized thereto before the notary public is sufficient.

The legal persons can change any convocation, which has already been announced or sent out when this RD (retroactively) came into force, if they want to make use of the flexible rules. There is no obligation to re-apply the convocation and participation formalities. Listed companies announce such change via a press release and on their website, no later than the sixth day preceding the day of the general meeting.

Listed companies are exempt from any obligation to send convocations and other documents they must make available by regular post or to keep them at the registered office of the company. Nonlisted companies provide the necassary documents via e-mail.

Option 2: Postponement of the general meeting to a later date

The board may also decide to postpone the general meeting and have it take place within ten weeks as of the final date on which the general meeting must legally take place. For companies with a financial year that coincides with a calendar year, this deadline is June 30, 2020. This means that, in this case, the general meeting can be postponed until September 8, 2020. The decision to postpone must be taken before May 3, 2020 (or a later date in case of an extension).

The board must notify the participants to the general meeting of the postponement in a timely manner. Convocation formalities for the deferred general meeting will be necessary.

Listed companies announce such postponement via a press release and on their website, no later than the fourth day preceding the day of the general meeting.

The RD also provides an option to postpone meetings that are already convened, but not held.

The board can not postpone general meetings that must be convened at the initiative of the statutory auditor or a shareholder with at least 10 percent of the shares or capital. Postponement is also not possible for general meetings that must be convened following the application of the stop loss procedure.

Board meetings

Any decision by a collegial governing body can be made by an unanimous written decision of all its members. Deviating provisions in the articles of association can be ignored. A meeting can also be held by telephone or video conference.

Postponement filing annual accounts

The period in which the annual accounts must be filed at the latest is also extended by a period of ten weeks. The RD also provides for additional extensions with regard to specific obligations for listed companies. An extension is also provided for the filing of annual accounts of foreign companies, associations or foundations with a Belgian branch.

Measures are limited in time

The measures of the Royal Decree have a limited duration and will apply from 1 March 2020 to 3 May 2020. This period can however be extended.

A shareholders’ meeting or a board meeting, convened before May 3, 2020 (or a later date in case of an extension), but held after this end date, may be held in accordance with the provisions of this RD.

The provisions of the RD are optional. If entities choose not to use the options offered, they must fully comply with the regime that would otherwise apply to them in this regard.

The RD applies to every meeting of an administrative body and to every general meeting that must be held or meetings that should have been held since 1 March 2020 but were not held. It also applies to the convocations in relation to these meetings. This RD does not apply to meetings that have been actually held since 1 March 2020 in accordance with the applicable rules before this RD came into force.

Scope

The Royal Decree applies to all companies and associations and legal persons governed by the Companies and Associations Code, the Companies Code, the Act of 27 June  1921 on non-profit associations, foundations and European political parties and foundations, the Act of 31 March 1898 on professional associations, and by the Act of 12 July 1989 laying down various provisions for the implementation of the Council regulation (EEC), nr. 2137/85  of 25 July 1985 on the European Economic Interest Grouping.

The Royal Decree also contains a catch-all for all legal persons established in accordance with special regulations, insofar they have a governing body or a general meeting.

The King may declare the provisions of the Royal Decree that apply to listed companies to companies whose shares or certificates relating to those shares are traded on a multilateral trading facility, or on an organized trading facility.