Virtual general meetings during Covid-19 crisis

The coronavirus epidemic took hostage the course of life in many countries around the world, which found themselves in successive confinements since 2020. It had however the merit of spurring technological progress and facilitating the endorsement of solutions that would have otherwise taken much longer. In Luxembourg, the legislator did not set itself aside from this movement whereas solutions were put in place in order to facilitate remote communications during the pandemic.

Several provisions such as those in relation to judicial proceedings had to be adapted to Covid-19 crisis Law of 20 June 2020) as well as state aid policies and the Luxembourg society in general (Law of 17 July 2020; Law of 24 July 2020; Law of 19 December 2020; Law of 29 January 2021, etc.).

Among others the law of 23 September 2020 on measures concerning the holding of meetings in companies and other legal persons (hereinafter the “Law”). At the time of its adoption, this Law could no longer be considered precocious (the crisis had been crawling for well over 6 months) but was not adopted too late either: the implemented measures were overall an extension of those that already existed under regulation of 20 March 2020 and, furthermore, companies had time to adapt themselves to it as the deadline to convene the companies’ annual general meetings had been extended to be set "on a date which falls within a period of nine months after the end of its financial year" (Law of 22 May 2020 extending the deadlines for filing and publishing annual accounts, consolidated accounts and related reports during the state of crisis).

After having been several times modified and extended, the legal effects of the Law were once again recently extended, by an amending Law of 17 December 2021. Indeed, "given the uncertain evolution of the pandemic situation" and considering that "no one can predict the evolution of the future health situation with certainty", it was necessary to extend the measures of the amended law of 23 September 2020 until the 31 December 2022 (Draft Bill of Law N°. 7916, Statement of Reasons, p.1). To understand this extension, one should keeping in mind "that holding general meetings or boards of directors for a company or other legal persons often involves international travelling, potentially from countries subject to more restrictive health measures depending on the evolution of the pandemic in their respective countries of residence”.

The Law provides for specific measures to hold, without physical presence, the shareholders’ general meetings as well as the meetings of other company bodies.

In particular, regarding the general meetings, art 1st of the Law provides that companies can hold shareholder/partner general meetings without a physical presence according to one or more of the following participation forms:

  • By remote voting, in writing or in electronic form, allowing their identification;
  • By videoconference or other means of telecommunication allowing their identification. Companies may hold general meetings in any of these forms even if their published articles of association, do not provide for it and regardless of the expected number of participants in its general meeting;

Finally, Companies may impose to their shareholders/partners and other meeting participants to attend the meeting and to exercise their rights in one of these forms.

These measures are without prejudice for a shareholder, partner or other participants to participate in the general meeting and exercise its rights through an agent appointed by the company. The shareholders or partners who participate by such means are deemed present for the quorum and majority calculation at this meeting.

Regarding other type of meetings of various company bodies, the Law provides that they may hold their meetings without a physical presence by:

  • Written circular resolutions; or
  • Videoconference or other means of telecommunication allowing the identification of the body members participating in the meeting.

In a similar fashion as for the general meetings, these other meetings may be held in one of the above forms even if the published articles of association, do not provide for such possibility, or contain contrary provisions;

Finally, and unlike the Law's provisions for the general meetings, companies' bodies cannot mix several participation forms, but must opt ​​for only one of the forms provided.

To be effective, these measures must be followed by several technologies, both for holding the meetings, but also to implement the decisions taken and facilitate the company’s action without a physical presence. Electronic signatures may be an excellent tool in this context, including, especially, the simple electronic signatures, which are "sufficient in many situations" (See article in French : "Utiliser les signatures électroniques dans le contexte du Covid-19"), as well as advanced electronic signatures, thus avoiding the heavy systematic use of qualified electronic signatures.

All companies and undertakings wanting to use a specific technology, but having doubts concerning its legal value and implications, are advised to verify those points with a legal professional.