Proposal to extend the deadlines for approval of the annual accounts, etc. and holding of ordinary general meeting
The Norwegian Ministry of Trade, Industry and Fisheries has proposed to resolve a temporary law to extend the deadlines for adopting the annual accounts, annual report and audit report and to extend the deadlines for holding ordinary general meeting for private and public limited liability companies and co-operatives.
The proposal suggests an extension of deadlines by two months. The proposal of an extension of deadlines are part of the measures taken by the government to mitigate the negative consequences for businesses related to the coronavirus outbreak. The deadline for the hearing of the proposal is Tuesday, May 19, and it is expected that the law will come into force soon.
Pursuant to Section 3-1 of the Norwegian Accounting Act, the annual accounts and the annual report shall be determined no later than six months after the end of the financial year, i.e. no later than June 30th. The Ministry proposes to extend this deadline by two months. It has also been proposed to extend the deadlines for imposing late fees under the Accounting Act and for submitting the audit report pursuant to the Auditors Act. The Ministry presupposes that the companies only will make use of an extended deadline if it is deemed necessary to ensure that the submission of the annual accounts is of a sufficient quality.
In order to ensure compliance with the deadlines for holding ordinary general meetings/annual meetings, it is further proposed to extend the deadlines in the Public and Private Limited Liability Companies Acts and the Co‑operatives Act. Pursuant to the Private Limited Liability Companies Act and the Public Limited Liability Companies Act, the ordinary general meeting must be held within six months of the end of each financial year, i.a. in order to consider and resolve the approval of the annual accounts and any annual report. The same deadline applies for co-operatives which are obliged to submit annual accounts. The Ministry presupposes that the companies only make use of the extended deadline to hold an ordinary general meeting if it is deemed necessary to ensure that all matters at the ordinary general meeting are handled satisfactorily.
The proposed extended deadlines will not apply for companies which are obliged to submit annual accounts and that have negotiable securities admitted to trading on a regulated market, and companies that are subject to supervision by the Financial Supervisory Authority under the Norwegian Financial Supervisory Authority Act.
The temporary act was submitted for hearing on May 15th, and the hearing deadline expires on 19 May. It is expected that the legislative process will be swift and that the temporary law will be passed in late May or early June. The act will be in force until 31 December 2020, if the Norwegian Parliament (Nw. Stortinget) passes the proposal. This means that companies with deviating financial years, and companies with a deviating deadline for holding ordinary general meeting stipulated in the company’s articles of association, will also be included.
The Ministry has previously proposed a temporary law that prolongs the earlier passed temporary regulation regarding an exception from requirement of physical meetings in companies, in the Norwegian corporate legislations. This regulation will be repealed on 31 October 2020, if it is not prolonged. The legislation regarding exception from a physical meeting will be reviewed by the Norwegian Parliament on 19 May, and will most likely be adopted within the next week or two.