AGM Voting Legislation: Temporary Legislation is Extended
Measures from the Corporate Insolvency and Governance Act (including AGM voting legislation) are extended to relieve pressure on businesses dealing with coronavirus.
The Government has announced that previous measures put in place to protect businesses from insolvency will be extended in England. Continuing to give them much-needed breathing space during the coronavirus pandemic.
The key change for UK Engage customers in England is the change to the temporary AGM voting legislation that covers virtual meetings. Companies (and other qualifying bodies) with obligations to hold AGMs will continue to have the flexibility to hold these meetings virtually until 30 December 2020 (an extension on the previous date of 30 September 2020). This means that shareholders/members can continue to examine company papers and vote on important issues remotely.
“It is vital that we continue to deliver certainty to businesses through this challenging time, which is why we are now extending these important and necessary measures to protect companies from insolvency.
Through this measure, we want to ensure businesses are able to not only come through this testing period but also to plan, adapt and build back better.”
Temporary general meeting legislation
The new temporary AGM voting legislation only applies to organisations that are formed under certain acts; these include:
- Companies Act
- Charity Commission
- Co-operatives Act
- Building Societies Act
- Friendly Societies act
- Credit Unions (N.I.)
The legislation also gives the right to each nation within the UK to adjust the legislation how they choose, with certain caveats. The current final date where all nations can allow this law to run is 5 April 2021.
Impact on AGMs
There are five clauses of interest, which are 3.2 to 3.6 inclusive: –
(3.2) A meeting is within this sub-paragraph if it is:-
(a) a general meeting of a qualifying body,
(b) a meeting of any class of members of a qualifying body, or
(c) a meeting of delegates appointed by members of a qualifying body.
(3.3) The meeting need not be held at any particular place.
(3.4) The meeting may be held, and any votes may be permitted to be cast, by electronic means or any other means.
(3.5) The meeting may be held without any number of those participating in the meeting being together at the same place.
(3.6) A member of the qualifying body does not have a right:-
(a) to attend the meeting in person,
(b) to participate in the meeting other than by voting, or
(c) to vote by particular means.
This gives all organisations, formed under the acts this legislation covers, the ability to undertake 100% remote digital general meeting processes, including online voting. Furthermore, it removes any rights of a member to demand to have a physical meeting.
The extension of the temporary AGM voting legislation is great news for those organisations with restrictive rules in their governance documents that conflict with COVID-19 movement restrictions. Organisations have an obligation to ensure the safety of their members and this new legislation allows for the safe running of AGM/EGM meetings remotely for all concerned.