Covid-19 - consequences for shareholder and board meetings in Norway
The Norwegian Ministry of Trade, Industry and Fisheries has on the basis of the recently passed Corona Act, adopted a series of temporary regulations providing for an exemption from requirements for physical meetings in public and private limited companies (including financial corporations not organized as AS or ASA), foundations, general partnerships and limited partnerships. The regulations came into force on 28 March 2020, and will automatically be repealed on 27 April 2020 if they are not prolonged.
The reason for the proposal
The temporary regulations are part of the measures taken by the government to mitigate the negative consequences for businesses related to the coronavirus outbreak.
The principle rule in Private Limited Liability Companies Act, Public Limited Liability Companies Act, The Cooperative Societies Act, The Partnerships Act and The Foundations Act is that company proceedings shall take place through physical meetings. As an extension of this rule, wet ink signature is required by law when signing protocols and other documents. In order to meet the health authority`s restrictions and safety measures, the newly adopted temporary regulations facilitate the holding of virtual meetings (video conference, telephone conference, Skype/Teams ect.). The regulations also promote legally executing documents by electronic signature.
Board meeting and meetings in other company bodies
All board meetings in the aforementioned legal entities can now be held virtually. For public limited companies (ASA) this means for example that the processing of financial statements does not have to take place in a physical meeting. Furthermore, this means that the managing director and the individual board member`s right to demand physical attendance is temporarily set aside. According to the new regulations, the chairperson of the board can decide that the board of directors shall discuss and decide matters through video- or telephone conferences, in writing, or any other satisfactory manner that is not in a physical form. However, if the meeting is conducted as a physical meeting, each board member has the right to participate in a satisfactory way without being physically present.
The right to not be physically present also applies for the managing director, auditor and other persons who have the right and duty to participate in the meetings. This also applies to the annual meeting between the board of directors and the auditor in accordance with section 2-3 of the Auditors Act.
The above-mentioned rules regarding the organization of meetings, etc. also apply as far as appropriate for:
- other corporate bodies and corporate structures in private limited liability companies and public limited liability companies;
- other corporate bodies in general partnerships or limited partnerships;
- supervisory board, control committee or other bodies of a co-operative; and
- other bodies appointed under section 36 of the Foundations Act.
General meetings in private limited liability companies, public limited liability companies, and annual meetings in co-operatives
The regulations authorize the board to decide that the general meeting in private limited liability companies, public limited liability companies, and annual meetings in co-operatives can be held without a physical meeting, by telephone- or video conference or by other satisfactory means. According to the regulations, the board of directors has a duty to ensure that all shareholders can participate and vote, and that participation and voting can be controlled in a satisfactory manner. The regulations authorize the board of directors to lay down further requirements regulating participation in general meetings and the casting of votes. Such measures may include the implementation of advance voting, regardless of whether or not this is stipulated in the company’s articles of association.
The board of directors shall further ensure that the auditor, the managing director and others who have a right and duty to attend, can attend the general meeting without being physically present.
According to the regulations applicable to the co-operatives, the above-mentioned rules for annual meetings also apply when electing representatives pursuant to section 37 of the Cooperative Societies Act.
Partnership meeting in general partnerships and limited partnerships
Those who have the authority in accordance with law or the partnership agreement to convene a partnership meeting in a general partnership or a limited partnership have the right to decide that the partnership meeting shall be held by video or over telephone, or any other satisfactory way that is not in a physical form. Everyone, to the extent possible, shall be allowed to participate in the meeting activities. However, if a physical meeting is held, everyone has the right to participate in a satisfactory manner without being physically present. Furthermore, the person who convenes the partnership meeting is responsible for compliance with said rules.
Minutes from the partnership meeting can be signed using an electronic signature.
The regulations apply as long as the Temporary law on the regulatory authority to remedy the consequences of the outbreak of Covid-19, etc. (the Corona Act) applies. The regulations came into force 28March 2020, and will be repealed on 27April 2020 if not prolonged.