Technology has long made it unnecessary for all shareholders to meet in one place to hold a shareholders’ meeting. Documents can be sent by email, and participants can discuss them while seeing and hearing one another. There is no reason not to use this option.
The pandemic highlighted the value of this approach and also prompted a change to the rules on online shareholders’ meetings. The original provision assumed that the company’s articles had to allow meetings to be held online.
This was a significant barrier. A company whose articles did not contain such a provision first had to hold a meeting before a notary, amend its articles and register the changes with the National Court Register (KRS) before it could hold an online meeting.
New rules for remote shareholders’ meetings
Following the amendment adopted on 31 March as part of the so-called special act, the rules for holding online shareholders’ meetings were substantially simplified.
Under Article 234(1) of the Commercial Companies Code, shareholders may participate in a meeting online unless the company’s articles provide otherwise.
The default rule has therefore changed: if the articles do not prohibit online meetings, they are permitted.
The author has not heard of a company with such a prohibition and assumes that most companies can begin holding online meetings. This is the default arrangement and is intended to remain in the Commercial Companies Code permanently, so meetings may continue to be held this way after the pandemic ends.
Rules for online shareholders’ meetings
There is one requirement for using the new arrangements: the company must have rules specifying how shareholders may participate in a meeting using electronic communications.
The rules should specify, among other things:
- How shareholders may participate in the meeting;
- How they may speak and exercise voting rights during it. These are technical and procedural matters. Most importantly, the system must enable two-way communication, allowing online participants to follow the proceedings and speak during them;
- How a shareholder must verify their identity to participate online;
- How the meeting’s cybersecurity will be ensured; and
- How a shareholder may object to resolutions being adopted.
The supervisory board should adopt the rules. If the company has no supervisory board, shareholders may adopt them by written consent to the rules, without holding a meeting, provided shareholders representing an absolute majority of votes give that consent.
In practice, the rules can therefore be adopted by collecting written approvals from shareholders representing an absolute majority. This also makes it easier to introduce online meetings.
The online-meeting provisions may also be included in the company’s general rules for shareholders’ meetings, if it has such rules.
Where must an online shareholders’ meeting be held?
An online shareholders’ meeting cannot take place entirely in a virtual setting. At least the chair and the minute-taker should be present at a specific location. Under Article 234 of the Commercial Companies Code, this should be the company’s registered office or another place in Poland, if the articles allow it.
This may matter when convening the meeting, as discussed below.
The meeting must take place in Poland, but remote participants do not have to be in the country. Shareholders participating by electronic means may be anywhere in the world, so a substantial part of the meeting may in practice take place outside Poland.
How do you convene an online shareholders’ meeting?
The rules on convening meetings have not changed.
First, a meeting may be convened in the traditional way by registered mail or courier, sent at least two weeks before the meeting date.
Second, a meeting may be convened by email if the shareholder previously consented to this method in writing and provided the email address to which the notice should be sent (Article 238 § 1 of the Commercial Companies Code).
In either case, the notice must explain:
- How to participate in the online meeting;
- How to speak during it; and
- How to vote and object to resolutions adopted at the meeting.
The notice must therefore include instructions for remote participation.
The meeting cannot be entirely virtual for the reasons described above. Because the notice specifies the meeting’s location, some shareholders may choose to attend in person rather than online.
An important question is whether an online shareholders’ meeting can also take place without formal notice under Article 240 of the Commercial Companies Code.
This procedure seems particularly suited to an online meeting. If the company needs to adopt an important resolution, all shareholders could meet by video conference and adopt it without formal notices, letters or a two-week wait.
Remote shareholders’ meeting without formal notice: Article 240
In the author’s view, an online meeting can be held without formal notice. The new rules do not exclude Article 240 for online meetings, so there appears to be no obstacle to all shareholders meeting online without prior notice.
In that case, identifying participants is especially important. The company should prevent an unauthorized person, or someone impersonating a shareholder, from voting at a hastily convened meeting.
For a small number of shareholders, a video conference is preferable because participants can readily confirm who is present or show identity documents online.
A telephone conference with many participants presents greater difficulty.
In that situation, the management board, and then the chair, has particular responsibility for ensuring the meeting is conducted properly. One possible aid is to give shareholders a password or token in advance, which they must use to join the conference.
It is also worth recording online meetings, not only those held without formal notice. A recording may help establish who attended and what happened.
Who signs what at an online shareholders’ meeting?
As with any shareholders’ meeting, minutes should be prepared. The minute-taker prepares them and the chair signs them, which is why the two should be in the same place. An audio or audiovisual recording may supplement the minutes.
Under the rules described in the article, the minutes should confirm that the meeting was duly convened and capable of adopting resolutions, list the resolutions adopted, state the number of votes cast for each and record any objections.
Resolutions should be entered in the book of minutes and signed by those present, meaning at least the chair and minute-taker.
Two attendance lists should be attached to the minutes:
- An attendance list signed by shareholders who participated in person; and
- A list of shareholders who voted using electronic communications. Their signatures are not required; only the chair and minute-taker sign this list.
Online shareholders’ meetings requiring a notarial deed
Questions may arise when an online meeting requires its minutes to be drawn up as a notarial deed.
The author sees no obstacle. In that case, the minimum number of people at the meeting location would be the notary and the chair. The details should be agreed with the notary in advance, as not every notary may be willing or technically equipped to record such a meeting.
If the minutes are drawn up as a notarial deed, the management board submits an extract to the book of minutes.
Can a proxy participate in an online shareholders’ meeting?
Yes. The remaining issue is how to verify the proxy’s authority and identity. It is preferable for the shareholder to know that someone voted on their behalf.
The proxy must demonstrate authority to act for the shareholder. The article states that the power of attorney must be in writing or it is invalid, and that a copy must be attached to the minutes. One possible process is to send a scan for initial review, then print and attach it to the minutes. The original should promptly be delivered to the company, so the shareholder may send it to the company’s registered office.
If you need help organizing an online shareholders’ meeting, contact us.
