15 May 2020 - In the context of the restrictions imposed by the authorities in Romania to prevent the spread of COVID-19, the government has enacted Government Emergency Ordinance 62/2020 ("GEO 62/2020"), which regulates certain temporary measures and derogations from the general rules applicable to the general meetings of shareholders ("GMS") and other corporate bodies (e.g. board of directors). The new measure is designed to help companies with their decision-making processes.
The measures described below introduced by GEO 62/2020 apply to GMS that were:
- held during the state of emergency period (ended on 14 May 2020);
- called during the state of emergency period, but held thereafter; or
- called and held within two (2) months after the end of the state of emergency period.
GEO 62/2020 is also applicable to the meetings of corporate bodies (e.g. board of directors) held during the state of emergency period or within 30 days from the end of the state of emergency period.
The temporary rules enacted by GEO 62/2020 are applicable to all companies regulated by law no. 31/1990 (e.g. joint-stock companies (S.A.), limited liability companies (S.R.L.)), except for public companies.
Meetings held by correspondence or electronic means
Under GEO 62/2020, companies are allowed to hold a GMS exclusively by correspondence or electronic means or a combination thereof, even if such method of holding the GMS is not allowed or is prohibited under the articles of association of the company.
When holding a meeting by electronic means (e.g. teleconference, videoconference), the electronic means used for the meeting must meet certain technical requirements, such as: (a) identification of the participants, (b) compatibility with usual fixed or mobile access technologies, (c) continuous and real-time transmission of the GMS, recording the meeting and archiving it.
In the event the meeting is held by correspondence, shareholders can cast their votes by registered letter, courier or electronic letter (signed using electronic signature).
Moreover, GEO 62/2020 clarifies certain formalities regarding secret voting when the GMS is held by correspondence, as well as the execution of the resolutions and minutes of the GMS.
Convening the GMS
The GMS may be called by the competent statutory body through means of distance communication (e.g. registered letter, courier, electronic letter (signed using electronic signature), fax). If the company has a website, the convening notice must also be published there.
In addition, GEO 62/2020 introduces new rules regarding the convening notice, such as:
(i) the method for holding the meeting must be communicated by the company's relevant competent statutory body to the shareholders at least five (5) days prior to the meeting;
(ii) in extraordinary circumstances triggered by measures taken by the authorities to prevent the spread of COVID-19, the relevant competent statutory body can change the place, date and/or time for the meeting and must inform the shareholders about the change at least five (5) days prior to the meeting;
(iii) in case of meetings convened prior to the enactment of GEO 62/2020 that cannot be held observing the measures taken by the authorities to prevent the spread of COVID-19, the relevant statutory body of the company can cancel the convening notice.
Documents in relation to the points on the GMS's agenda (e.g. financial statements, directors report, auditor's report, proposal for the distribution of dividends) shall be published on the company's website. In the event the company does not have a website, the documents must be sent by email or, if requested by a shareholder, by post or courier service.
New term for the approval of the annual financial statements
The term for holding the ordinary GMS of joint-stock companies for the approval of the annual financial statements has been extended until 31 July 2020. This is a welcome change to ensure consistency with the extended term for submitting the annual financial statements with the fiscal authorities.
Meeting of the corporate bodies
Under GEO 62/2020 the members of corporate bodies can participate in the relevant meetings using direct means of distance communication, provided that certain technical requirements are met irrespective of the subject matter of the decision.
Article originally published on 15 May 2020
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.