Regulation on Virtual Meetings & Option to Use E-signatures
Grand Ducal regulation by Reyhan Gulec
Coronavirus has hit all the world and businesses around the globe. This scale health crisis requires rapid regulatory adjustments. Legislative bodies and regulatory authorities are trying their best to ensure the businesses run smoothly as much as possible with least human contact. Likewise, in Luxembourg, on 20th March 2020 a Grand Ducal regulation was published for virtual meetings in companies and other legal entities due to the state of emergency declared on 18 March 2020. Kindly keep in mind that this decree is applicable mutatis mutandis to all other legal entities
The below mentioned opportunities are granted for the meetings to be held until 30 June 2020, given that the state of emergency is for 3 months, for now.
In addition, any company and legal entity, which has already held its meetings before this decree may still opt for the methods/opportunity granted under this decree up until 3 days before the meeting date via publishing and/or a notification to its shareholders and proxy holders.
Particularly with respect to annual general meetings; a company is authorised to convene its annual general meeting for the later of the following dates: (i) a date within six months after the end of its financial year and (ii) a date within a period ending 30 June 2020.
Accordingly, a company may hold any general meeting without a physical meeting, and require its shareholders or members and other participants in the meeting to attend the meeting and exercise their rights exclusively;
by voting from a remote location in writing or electronically, provided that the full text of the resolutions or decisions to be taken has been published or communicated to them;
through a proxy holder appointed by the company; or
by video conference or other telecommunication means permitting their identification.
This is regardless of the expected number of participants in its general meeting and notwithstanding any provision to the contrary in the articles. The shareholders or members participating by way of these means shall be deemed to be present for meeting the quorum and majority at such meeting.
For meetings of management bodies, the meetings may be held and the resolutions may be adopted by the below mentioned means provided that identification of the participants are ensured:
by written circular resolutions; or
by video-conference or other telecommunication.
Use of e-signatures
This matter goes with the increase in use of e-signatures due to need in execution of documents remotely in crisis time.
Pursuant to article 1322-1 and 1322-2 of the Luxembourg Civil Code, where parties reach an agreement, orally, electronically or physically then generally it is deemed that they have entered into an agreement.
In line with the Regulation (EU) No. 910/2014 on electronic identification and trust services for electronic transactions in the internal market, Luxembourg has a list of supervisory bodies for qualified certificated providers of advance e-signatures and qualified e-signatures which is a publicly open information. It could be said that these two are more advisable or preferable depending on the nature of the transaction due to security matters compared to the standard e-signature.
On the other hand, e-signatures cannot be used for every transaction such as for a formal notarisation, i.e. deeds of incorporation, the amendment of articles of association, or contracts that concern the transfer of real, tangible property.
It is significant to observe the security, validity, data protection and compatibility with current systems while using e-signatures not to come across a challenge in the long run.
By Reyhan Gulec, Member of ILA Board Composition Committee and Sustainability Strategy for Boards Committee - Investment Funds Lawyer