In the context of the state of emergency in Romania, various restrictions in the movement of population have been implemented. Companies have already started to adapt their business models to the new social reality, but their internal decision-making process, which often involves meetings with multiple persons, was impacted, as the current legislation did not extensively provide for alternative means for the organisation of such meetings.
On 7 May 2020, the Romanian Government approved the Government Emergency Ordinance No. 62/2020 on certain measures concerning companies regarding the organisation of meetings of their corporate bodies (the GEO), published in the Official Gazette No. 372 dated 8 May 2020. The GEO regulates certain temporary measures for holding general meetings of shareholders (GMSs) and meetings of collegial (managing) corporate bodies, without requiring physical interactions. These are meant to temporarily replace and/or complete certain provisions from the company law No. 31/1990 (the Company Law).
Listed companies, issuers of bonds admitted to trading and any other entity falling under the law No. 24/2017 on issuers of financial instruments and market operations are expressly excluded from the GEO’s scope.
RTPR, along with other reputable entities and organizations in Romania (e.g., AMCHAM, CDR, CECCAR, CAFR, Fondul Proprietatea, SIF Moldova, Nuclearelectrica, ASF, BVB, etc.), has actively participated in the process of improving the initial draft GEO by offering its input and knowledge.
- Whom do the new rules apply to and for how long?
The new rules under the GEO apply to all companies regulated by the Company Law (e.g., S.A.s, S.R.L.s, etc.).
The following types of meetings fall within the scope of the GEO:
- GMSs convened prior to the GEO’s entry into force, but set to take place during the state of emergency;
- GMSs convened after the GEO’s entry into force and held during the state of emergency;
- GMSs convened during the state of emergency and held after the expiry of the state of emergency;
- GMSs convened and held within two (2) months from the expiry of the state of emergency; and
- Meeting of collegial (managing) corporate bodies taking place during the state of emergency or within 30 days from the expiry of the state of emergency.
The rules provided for GMSs are also applicable to bondholders’ meetings.
- Convening of the GMS
What means can be used?
The competent corporate body can convene the GMS via:
- any means of distance communication or a combination thereof i.e., registered letter, courier, electronic letters having incorporated an extended electronic signature, telefax or any other means ensuring the transmission of text; or
- the publication in the Official Gazette and a newspaper of wide circulation in the in the locality of the company’s registered office, as currently provided by the Company Law, in case of S.A.s.
Is the publication of the convening notice on the company’s website mandatory?
Yes, the convening notice shall be published on company’s website if such exists and, if the case, on websites addressed to various types of companies. In addition, it shall also be communicated to shareholders via e-mail, if their e-mail addresses are known by the company.
How the documents/ information are to be provided to shareholders prior to GMS?
Any relevant information and documents with respect to the items on the agenda to be provided prior to the GMS (e.g., financial statements, annual reports, etc.) shall be made available via publication on the company’s website.
If the company does not have a website, the information/ documents shall be provided via e-mail or ultimately, if e-mail delivery is not possible, at the shareholders’ request, such information/ documents shall be provided by mail or courier (at the company’s expense).
Special provisions regarding the amendment of the convening notice
- Any amendments to the agenda shall be communicated to shareholders using the same means and observing the same requirements as those provided by the GEO for convening GMSs;
- In case of GMSs convened prior to the GEO’s entry into force but set to take place during the state of emergency, the competent body shall inform the shareholders, at least five (5) days prior to the GMS date, with respect to the procedure for holding the GMS and voting, via the means provided by the GEO for convening GMSs;
- In case of grounded reasons based on exceptional circumstances related to measures taken by authorities for the prevention of COVID-19, the competent body can amend the date and/or time and/or place of the GMS and shall inform the shareholders, at least five (5) days prior to the GMS date, about this change, as well as about the procedure for holding the GMS and the voting means, via the means provided by the GEO for convening GMSs; the reference date shall not be impacted by changes in the GMS date and the already submitted powers-of-attorney and voting ballots shall remain valid, except if new ones are submitted;
- amendments regarding the date, time, location or the procedure for holding the GMS and for exercising the voting rights do not render the obligation to repeat the convening formalities and do not represent cause of nullity of the GMS resolution;
- the convening may be called off if a GMS convened prior to the GEO’s entry into force cannot be held in accordance with the GEO or at companies’ registered offices, as provided by the Company Law, but without breaching the measures for prevention of the spread of COVID-19.
- Procedure for holding the GMS
What means can be used?
Along with the ordinary physical presence, the GEO allows to hold the GMS exclusively by correspondence or through electronic means of distance communication subject to certain technical requirements (e.g., compatibility with usual fixed or mobile access technologies, as well as with a large number of operating systems and connectivity to fixed or mobile public electronic communications networks), even in case of express prohibition within the company’s articles of association.
These means may be used separately or combined.
What if there are items on the agenda requiring secrecy of the votes cast?
In such cases, the corporate body competent to convene the GMSs shall ensure the observance of the secrecy of the votes cast, except in relation to personnel responsible for counting and validating votes.
When, where and how should the powers of attorney be submitted?
The powers-of-attorney for representation in GMSs shall be delivered so as to be received by the company before the date of GMS. They shall be submitted to the place indicated in the convening notice, by (i) registered letter, (ii) mail, (iii) courier, or (iv) e-mail, in case of electronic letter having incorporated an extended electronic signature.
Specific exceptions for GMSs held by correspondence
- certain provisions from the Company Law which can only be applied in case of physical presence of shareholders/management (e.g., the opening of the GMS and its secretaries, etc.) is not applicable in case of GMSs held exclusively by correspondence; participation of the management is not required for this type of GMSs;
- the votes expressed by correspondence shall be delivered to the company before the GMS date via (i) registered letter, (ii) mail, (iii) courier, or (iv) electronic letter having incorporated an extended electronic signature.
Who shall draft and sign the minutes of the GMS?
The minutes of GMS shall be drafted and signed by (i) the chairman of the board of directors/ the director having representation powers/ the chairman of the directorate or, in case of impossibility to fulfil his/her obligations, by an appointed proxy, and (ii) by the company’s legal representative, and (iii) where possible, by the secretary of the meeting appointed in accordance with the articles of association or, if not possible, by a company’s employee appointed as technical secretary of the GMS.
In case of GMSs held exclusively by correspondence, the reference above to the secretary of the meeting is not applicable.
Who shall draft and sign the resolution of the GMS?
The resolution of the GMS shall be prepared and signed with handwritten (private) signature or extended electronic signature by the chairman of the board of directors/ the director having representation powers or the chairman of the directorate or, in case of impossibility to fulfil his/her obligations, by the appointed proxy.
- No challenge
GMSs which took place during the state of emergency, but prior to the GEO’s entry into force, and which were held, with the unanimous approval of all shareholders, by following the procedures provided by the GEO cannot be held void for breach of the conducting and voting rules.
The casting of votes during such GMSs shall be presumed to represent a tacit approval regarding the procedure pursuant to which they were carried out.
- New deadline for annual mandatory GMS
- the deadline provided by the Company Law for holding the annual ordinary GMS of S.A.s is delayed until 31 July 2020;
- until the above mentioned date, the competent corporate body is not required to convene the GMS in case the annual financial statements show that the net assets have fallen below ½ of the subscribed share capital.
- Meetings of collegial (managing) corporate bodies
Meetings of collegial (managing) corporate bodies may take place via electronic means of distance communication, irrespective of their agenda, subject to certain technical requirements provided by the GEO.
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