New law: New company laws enable shareholder decision-making, despite coronavirus restrictions, and extend time limits for filing at Companies House
Officers and shareholders of limited companies will welcome new laws that enable them to hold shareholder ‘meetings’ despite the coronavirus lockdown and social distancing restrictions, and which extend time limits for filing certain information at Companies House.
This update was published in Legal Alert - July 2020
Legal Alert is a monthly checklist from Atom Content Marketing highlighting new and pending laws, regulations, codes of practice and rulings that could have an impact on your business.
The new laws include provisions saying that:
- Meetings can be held, and votes cast, electronically, eg using Zoom or Skype.
- Meetings do not have to have a physical venue and the individuals making up the quorum do not have to be in the same physical place – meetings can be virtual.
The corollary is that shareholders are not entitled to attend meetings personally, or participate in meetings except by voting, or voting by particular means.
This may inhibit shareholder engagement so companies are encouraged to communicate with shareholders before, during and after meetings – for example, by inviting and answering questions electronically.
The new laws apply to meetings between 26 March (so they apply retrospectively) and 30 September 2020. The end date of 30 September can be shortened if restrictions are lifted, or extended in three month blocks, provided it is not extended beyond 5 April 2021.
Regulations will be made to deal with detailed issues such as the format of the notice of meeting, and how and when it is to be sent, which will override any inconsistent or contrary provision in a company’s articles of association. The government also intends to publish best practice guidance.
The new laws also say that Regulations may be made to extend the time limits for filing specified information at Companies House during the coronavirus restrictions, including information relating to:
- Accounts and confirmation statements.
- Changes to directors and secretaries.
- Companies needing to hold meetings, or anticipating difficulties in filing information at Companies House within current time limits, should monitor the changes and look out for government guidance, so they can take advantage of them once details are clear.
Disclaimer: This article from Atom Content Marketing is for general guidance only, for businesses in the United Kingdom governed by the laws of England. Atom Content Marketing, expert contributors and ICAEW (as distributor) disclaim all liability for any errors or omissions.
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