Can I cancel or Postpone AGMs and other general meetings
The outbreak and spread of COVID-19 has already had a significant effect on business around the country and world. The government has now advised that further measures to reduce the rate and extent of its spread is recommended which, includes, amongst other things, social distancing strategies (such as school closures, encouraging greater home working and reducing large scale gatherings).
These recommendations pose a challenge for many companies who are due to hold their annual general meetings (AGMs) or are in the process of sending out or planning to send out notices of their AGMs. Whilst there is no statutory requirement for a private company to hold any general meetings, not even an AGM some companies' articles will require them to hold an AGM and any such provision will continue to be binding on the company until the articles are amended. A company may also hold an AGM even though not bound to by the Companies Act or its articles.
Where companies are required to hold AGM's or have given notice to hold one or a General Meeting (GM) already, given the suggested travel restriction and social distancing taking place in the UK, companies may wish to consider postponing or adjourning their AGM/GMs.
Under common law, it is possible to adjourn, but not postpone a meeting of a company once notice has been given. A company's articles may give the board the power to postpone a general meeting between the time of sending out the notice of the meeting and the meeting itself where it is unreasonable or impractical to hold it at the appointed time, date or place.
A Chairman may adjourn a meeting for the following reasons:
1. In accordance with the company's articles;
2. With consent of the members by way of an ordinary resolution;
3. If it appears to the Chairman that an adjournment is necessary to protect the safety of any person attending or to ensure that the meeting is conducted in an orderly manner.
Due to the uncertainly of COVID-19 and the length of time it will take for things to go back to normal, it may not be advisable to adjourn or postpone a general meeting unless, it is impossible to hold the meeting. Instead, shareholders should be strongly encouraged to register their vote through appointing proxies.
Companies may also need to consider other alternatives such as electronic/virtual meetings.
There is nothing in the Companies Act 2006 which prevents electronic meetings, provided that the attendees of such a meeting can attend and speak and vote at it. It is wise to check the company's articles of association to ensure that they do not restrict the holding of electronic meetings. Due to the Government's advice to avoid social gatherings, companies may also wish to hold the meeting in separate rooms using a video link, provided all shareholders can hear and speak.
This is not legal advice; it is intended to provide information of general interest about current legal issues.