New rules for joint stock companies have been introduced in changes to the Commercial Code.
The changes have already been signed by the President and came into force on 1 December 2009.
Some of the rule changes are to enable shareholders to vote at joint stock company general meetings when they cannot attend in person. Company statutes may be amended to permit shareholders to participate and vote at general meetings by electronic means.
However, the statutes must require that the votes will only count if it is possible to identify both the person entitled to vote and the shares to which the voting rights are attached. This will either allow them to cast their vote (in written form) before the general meeting takes place or to participate in and vote at a general meeting without being present.
Another change removes the need for the company with bearer shares to publish an invitation to its general meeting in a national daily newspaper as well as the Commercial Bulletin. A second method of publication is still required but is left at the company's discretion.
There are also changes to the 'decisive day' – the day on which entitlement to attend and vote at the general meeting is determined by share ownership. The new decisive day rules will apply to stock certificates as well as book entry shares.
The rule change means that the decisive day for joint stock companies cannot precede the day of the general meeting by more than thirty (instead of the current seven) days. The only exception is for companies whose shares are traded on a regulated market: their decisive day is always the seventh day preceding the general meeting.
There is a new section in the Commercial Code dealing with proxy voting at general meetings. Proxies can be granted either for a single meeting or for multiple meetings within a certain period.
One significant change allows members of the board of directors or the supervisory board to act as proxy for shareholders. Before the general meeting, the proxy must tell the shareholder any facts they need to know to decide if there is a conflict of interest between them. If a member of the company body is to act as proxy, it must provide this information at the same time as it produces the meeting notice or invitation.
There is also a change allowing joint stock companies with shares traded on a regulated market to convene an extraordinary general meetings on a date no later than 50 days after the board received the request for the meeting to be called. The limit for other joint-stock companies is 40 days.
Similarly, joint stock companies with shares traded on a regulated market must publish their invitation to the EGM with 21 days of receiving the request, while other joint stock companies have just 15 days.
Law: amendment to the Commercial Code enacting Directive 2007/36/EC
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The original publication date for this article was 14/12/2009.