Coronavirus – Shareholders and board meetings – Belgium

Royal decree No 4 ¹ contains various provisions on co-ownership and companies and associations law in the context of the fight against the Covid-19 pandemic. It was published in the Belgian State Gazette on 9 April 2020.

The COVID-19 Decree is, amongst others, aimed at providing companies that wish to convene shareholders or board meetings in this time of social distancing with the necessary tools to act appropriately.

How does the COVID-19 Decree affect shareholders meetings?

Companies that need to call together their shareholders meetings are now granted two options in addition to the usual convening methods existing under the Belgian Companies and Associations Code.

The first option gives companies the opportunity to let their shareholders meeting proceed as planned but “behind closed doors.” This means that the board of directors has the power to compel the shareholders to participate in the shareholders meeting via videoconference. In such case the shareholders can vote using a voting form or, alternatively, by way of a voting proxy which however can only be granted to a specified proxyholder as appointed by the board of directors. Each shareholder must have the choice between using a voting form or a voting proxy. For shareholders (or board) decisions that require the execution of an authentic deed in the attendance of a notary public (e.g. a capital increase), it is sufficient that one proxyholder sits together with the notary public. Other participants can join via conference call.

In the interest of flexibility, it is stipulated that the shareholders can transfer the voting documents to the company by email. The board of directors can furthermore demand shareholders to exclusively exercise their right to question to the board in writing. Questions must be raised four days prior to date at which the shareholders meeting is to be held. They will be answered at the latest on the day of the shareholders meeting but before voting takes place or, otherwise, the directors will answers the questions verbally through videoconference.

With regard to annual general shareholders meetings, the second option provides for the possibility to delay such annual general shareholders meetings within a maximum of ten weeks from the date on which the annual general shareholders meeting is legally required to take place. Companies whose financial year ended on 31 December 2019 must, in the normal course of business, hold their annual general shareholders’ meeting on the date as specified in their articles of association and in any case before 30 June 2020. They must then file their annual accounts with the National Bank of Belgium before 31 July 2020.

The COVID-19 Decree allows for these companies to postpone their annual general shareholders meeting until 8 September 2020 at the latest and to file their annual accounts until 9 October 2020. Should companies want to make use of this option, they certainly must duly inform their shareholders of the envisaged postponement. In case the annual general shareholders meeting has already been convened but not yet taken place, a new invitation needs to be sent out to the shareholders. It is important to note that no delay is allowed if the so-called alarm bell procedure must be applied or if the statutory auditor or 10 % of the shareholders request the board of directors to convene a shareholders meeting.

In addition to these options provided for by the COVID-19 Decree, companies also can hold their shareholders meetings by making use of the unanimous written decision-making procedure as provided for the in the Belgian Companies and Associations Code.

How does the COVID-19 Decree affect board meetings?

The COVID-19 Decree determines that board meetings can in each case be held by means of videoconference and that resolutions of the board can be adopted by unanimous written consent, even if the articles of association of the company state differently.

COVID-19 Decree: application in time

The COVID-19 Decree is applicable as of 1 March 2020 until 3 May 2020. It is however most likely that the envisaged end date of 3 May 2020 will be prolonged. The decree is applicable to shareholders meetings that:

• have or should have been convened since 1 March 2020
• hould have been held between 1 March 2020 and 9 April 2020 on the basis of a legal or statutory rule but which have not been held (for example for reasons of public health)
• must be held between 9 April 2020 and 3 May 2020
• are convened before 3 May 2020 which are held after this date

The decree is not applicable to shareholders meetings that actually took place between 1 March 2020 and 9 April 2020. In case of shareholders meetings convened before the entry into force of the COVID-19 Decree on 9 April 2020, the company can make use of the measures installed by this decree in so far as the shareholders are correctly informed of the changed approach.

The above overview is a summary of the impact of the COVID-19 Decree on Belgian company law. The same principles apply to Belgian associations. Please note that some exceptions may apply to your specific situation. Do not hesitate to contact us if you would like to receive more information.

¹ Koninklijk besluit nr. 4 houdende diverse bepalingen inzake mede-eigendom en het vennootschaps- en verenigingsrecht in het kader van de strijd tegen de Covid-19 pandemie” / “Arrêté royal n° 4 portant des dispositions diverses en matière de copropriété et de droit des sociétés et des associations dans le cadre de la lutte contre la pandémie Covid-19.

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