Amidst all of the angst and disruption of the ongoing COVID-19 pandemic, it remains incumbent on directors of limited companies to continue to operate the business as fully as possible, in the safest possible way and within the law. With many adhering to the ‘lockdown’ instructions imposed by the government on 23 March 2020, or otherwise socially distancing, this is proving quite a challenge to say the least.
It is therefore helpful for directors of limited companies to be aware of and to maximise the use of provisions that are available to them under relevant legislation. Section 360A in Part 3 of the Companies Act 2006 (CA 2006) provides that nothing in Part 3 should preclude a company from holding and conducting a meeting in such a way that would enable individuals to participate without being in the same place as one another. This applies for board meetings and general meetings (i.e. meetings of the shareholders). As such, subject to no provisions in the articles of association of the company to the contrary (as discussed below), a meeting can lawfully be hosted so that participants can speak and vote for example by video conference and/or postal ballot.
However, this is conditional upon the articles of association of a company not containing any provision that would otherwise prevent such a remote meeting. Such a provision may be express or implied. For example, the articles of association may include very specific requirements as to the format and proceedings of meetings, and arguably this could imply that a remote meeting is not an option. Equally the articles of association may be silent on the point, and, whilst this is not ideal (as there is still scope for dispute), they should not prevent the meeting from proceeding.
As an informal interim measure, the directors who are required to be in attendance at a proposed remote board meeting may unanimously agree to the meeting. Decisions outside of the meeting may be made by the directors by a passing a unanimous resolution in writing (section 291 CA 2006). Care must be taken when going down this route however; a simple exchange of emails will not do. Similarly, decisions outside of a meeting may be made by shareholders outside of a general meeting using the written resolution process (sections 292 - 295 CA 2006) and, again, the correct process must be followed for this to be valid and there are some limitations on what can or cannot be done using this process.
Once the directors feel that they are in a position to proceed with the remote meeting, be it a board meeting or a general meeting requested by the shareholders, the next step is to organise and hold the meeting. Below is a handful of top tips on effectively carrying this out:
Although the above is merely a guide to the principles of running a remote meeting, it by no means provides legal advice regarding the circumstances of any company. By giving due consideration to the points above it is possible to successfully hold and manage a remote meeting, and should you require any assistance or advice in this required please contact a member of our Corporate team who will able to assist.