What do you need to be aware of when Holding Annual General Meeting during COVID-19. Annual General Meeting (AGM) provides one of the few opportunities shareholders have to question the board, engage directly with management, and hear the views of other shareholders.
With the outbreak of the COVID-19 is causing companies to well plan ahead with their arrangements for 2020 AGMs in light of group gatherings and travel restrictions. If AGM is not held at a public space, means people can access from time to time, whether by payment or not. Then, it does not break the regulations of group gatherings.
Under the Companies Ordinance (Cap. 622) (“CO”), there are certain resolutions to be made within a specified period. The exemption under Item 11 of Schedule 1 of the Regulation (“Item 11”) may also apply to such meeting. Whether other types of general meetings fall within the exemption will have to be determined on a case by case basis with reference to any specific requirements under the relevant Ordinance or other regulatory instruments governing the holding of such meeting.
Possibility of deferring or adjourning AGM
As public health and safety is of paramount importance, all persons have a part to play in combating the transmission and spread of COVID-19. Companies should consider the possibility of deferring or adjourning their general meetings until after the expiration of the Specified Period taking into account whether –
- the timing of holding the general meeting is subject to any statutory requirement;
- any such requirement is capable of extension, waiver or otherwise; and
- any business to be dealt with at the meeting is of such urgency and importance that necessitates the holding of the meeting.
Measures in the conduct of Annual General Meeting
(A) Hybrid meetings
The CO facilitates a hybrid meeting, namely, a physical meeting together with a form of electronic participation using tele-conferencing, video-conferencing or other electronic means.
By virtue of section 584, a company is expressly permitted to hold Annual General Meeting at 2 or more places by using technology. This enables members who are not at the same place to listen, speak and vote, subject to the provisions of the company’s articles of association (“articles”). In this connection, companies may review their articles to see if a hybrid general meeting is permissible.
To reduce the need for physical attendance, companies can use technology and digital tools to hold hybrid general meetings.
Companies may consider making necessary arrangements to segregate attendees across different venues. For example, company could provide video-links in separate meeting rooms. Then the attendee at each venue to participate.
Pursuant to section 576 of the CO, if a general meeting is to hold at 2 or more places. The notice of meeting must specified the principal place of the meeting and the other place(s) of the meeting.
(B) Pre-registration and proxy voting
In order to better manage the number of members that may attend the meeting, companies may consider requesting members to pre-register if they (or their proxies) wish to attend the meeting in person. Companies may also encourage members to vote by proxy, or, if practicable, by electronic modes of voting, and to submit their questions to management in writing before the meeting.
Under section 585(3) of the CO, where a company has more than 1 member, subject to the provisions of the company’s articles, 2 members present in person or by proxy is a quorum of a general meeting of the company. The right to appoint a proxy and the procedures relating to the appointment of proxies stipulated in sections 596 to 608 of the CO (Subdivision 9 of Division 1 of Part 12).
(C) Restriction on the number of attendees
In the interest of public health, companies should restrict the physical attendance of attendees of a general meeting venue. Also companies need to implement the precautionary measures set out to achieve social distancing.
(D) Other precautionary measures
Companies should implement appropriate precautionary measures at the meeting venue. For example –
- arranging for body temperature check for all persons entering the meeting venue. Not allow the persons with high body temperature to enter the venue;
- requiring all persons entering the meeting venue to wear a face mask;
- providing hand sanitizers for use by persons entering the meeting venue;
- providing sanitizing mats at the entrance of the meeting venue; and
- arranging for appropriate physical distancing between seats.
Companies should adopted the meeting arrangement and precautionary measure as far as practicable. Then update their members about the practices.
For further information, please contact us.
You may want to read: http://centreo.hk/business-registration-ordinance-company/