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On 20 May 2020, the Corporate Governance and Insolvency Bill was published and had its first reading in the House of Commons.
This started its process through Parliament and the Government has indicated that it will ask Parliament to expedite the progress of the Bill.
Below is a summary of the various measures that will have a temporary impact on how meetings are held whilst social distancing measures are in place:
The Bill will allow companies that need to hold meetings to do so in ways that are aligned with the current social distancing rules. The period which the measure will cover is between 26 March 2020 and 30 September 2020. The September date is flexible and there is the ability for the Government to extend the date in increments until 5 April 2021. Equally, the period may be reduced should social distancing measure be relaxed earlier than anticipated.
Types of Organisations
The measures will apply to organisations including:
- a company within the meaning of section 1(1) of the Companies Act 2006 – this includes limited companies by shares and guarantee, unlimited companies, public companies and community interest companies
- a charitable incorporated organisation within the meaning of Part 11 of the Charities Act 2011
- a registered society within the meaning of the Co-operative and Community Benefit Societies Act 2014
- a society that is registered within the meaning of the Friendly Societies Act 1974 or incorporated under the Friendly Societies Act 1992
The types of meetings that will be covered by this legislation will include general meetings and meetings of members (which includes shareholders) and/or delegates of companies.
Revised Procedure for Meetings
Any meeting that will be required to be held during this time will be subject to the following provisions:
- Meetings will not be required to be held in any specific place
- They may be held, and votes cast, by electronic or any other means
- They may be held without any number of those participating in the meeting being together at the same place.
The Bill also stipulates members of a company will not have the right to:
- Attend the meeting in person
- Participate in the meeting other than to vote
- Vote by particular means
If a company has a duty, either statutory or through its Articles/constitution, to hold an AGM by a date that ordinarily falls between 26 March and 30 September 2020, the Bill allows an organisation to extend the deadline to hold its AGM until 30 September 2020.
The Bill also temporarily amends certain provisions of the Insolvency Act 1986.
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