December 2020: an update on company law
On 26 June 2020, the Corporate Insolvency and Governance Act 2020 (CIGA) came into force. The aim of this legislation was to provide businesses with flexibility to allow them to continue trading whilst fulfilling their legal obligations and managing the circumstances of Covid-19. We set out the key aspects of this legislation in respect of companies in our earlier briefing.
Following that, on 29 September 2020 the Corporate Insolvency and Governance Act 2020 (Coronavirus) (Extension of the Relevant Period) Regulations 2020 came into force to extend the "Relevant Period" under CIGA from 30 September 2020 to 30 December 2020, as noted in our earlier briefing.
The "Relevant Period" has now been further extended in the Corporate Insolvency and Governance Act 2020 (Coronavirus) (Suspension of Liability for Wrongful Trading and Extension of the Relevant Period) Regulations 2020, which came into force on 26 November 2020. The "Relevant Period" will now end on 30 March 2021. As such, the relaxed rules surrounding general meetings during the pandemic will last for over a year.
Under these rules, any company, charity, society or other body within the scope of CIGA, which was due to hold a meeting between 26 March 2020 and 30 March 2021, can delay the meeting until the end of that period (30 March 2021). This will override any existing statutory or constitutional time limits.
If a meeting is held between 26 March 2020 and 30 March 2021, members of the relevant entity do not have the automatic right to do the following:
- attend the meeting in person
- participate by a means other than voting
- vote by any particular means
Again, this applies regardless of whether there are other statutory or constitutional requirements to the contrary. Whilst it is still prudent for members to be involved in meetings as fully as possible, CIGA makes it clear that they only have the automatic right to be able to vote on resolutions. This may reduce the business of the meeting that needs to be addressed. CIGA also allows for meeting to be held electronically.