Author: Mgr. Zuzana Burdová, 22. 03. 2021
Nowadays, a lot of legal entities are facing this issue – companies [typically limited liability company (s.r.o.), joint-stock company (a.s.)], cooperatives, associations, homeowners’ associations, etc. The collective bodies’ sessions of legal entities (typically general meetings or members’ meetings) are usually held in person. However, the pandemics does not make it easy and a lot of legal entities are trying to solve this problem, especially in connection with the approaching deadline for approval of the financial statements.
The Civil Code and the Business Corporations Act explicitly take these situations into account in connection with some legal entities, when these acts regulate making out-of-session decisions (so called decisions per rollam). For example the general meeting of a limited liability company can always make out-of-session decisions unless the Memorandum of Association (or Deed of Foundation) explicitly excludes this option. On the contrary, making out-of-session decisions in a joint-stock company, cooperative, association or homeowners’ association must be expressly allowed by the Articles of Association. But what if the Articles of Association do not allow it?
The solution was brought last year by so called Lex Covid, meaning Act N. 191/2020 Coll. According to this act, every decision-making body can make out-of-session decisions by correspondence or using technical means (via internet, videoconference, teleconference, etc.) till 30th June 2021 (regardless of the duration of the emergency provisions during the pandemics), even if the forming juridical act does not expressly allow it. That means that till 30th June 2021, every decision-making body can make decisions per rollam.
If the conditions of making decision per rollam are not regulated by the forming juridical act, the statutory body should determine the conditions for decision-making procedure of the supreme body and for other bodies conditions should be determined by this other bodies. The conditions should be announced to the decision-making body in sufficient advance before the decision making, typically in the form of rules of procedure.
So how it works? Considering we live in the 21th century, let’s forget about post office and let’s talk about the easiest way without unnecessary paper work – by e-mail, videoconference via Microsoft Teams or by teleconference.
If this issue is not regulated in your forming juridical act, it is necessary to set out the entire procedure, rules and conditions in the rules of procedure, including the method of sending the invitations, the voting time, the method of decision-making, determination of the deadline and the method of informing the members of the decision-making body about the results.
The body convening the virtual meeting will send to the members of the decision-making body (typically via e-mail registered in the list of members) the rules of procedure with the invitation and the program proposal, documents relevant to the decision and information that the decision-making process will have the form of per rollam procedure due to the pandemics.
If the decision will be made via e-mail, the members vote by sending an email within the specified period of time to the specified e-mail address (typically the e-mail address of the legal entity) by indicating “FOR”, “AGAINST” or “ABSTAINED” to each drafted resolutions.
If you wish to use videoconference or teleconference, the decision making will take place within the specified period of time via for example Microsoft Teams in the way determined in the rules of procedure, practically similar to the manner of decision making process hold in person, thus the minutes of the general meeting or members’ meeting will be similar as usual.
In any case, the body which convened the virtual meeting will make a minutes of the general meeting or minutes of members’ meeting with the results of the voting and will send it to all the members via e-mail or publish the results on the legal entity’s website. As mentioned above, the precise procedure has to be described in the rules of procedure.
However, be aware that where the decision of the body should be certified with an authentic instrument (typically while changing the Memorandum of Association or Articles of Association), the above-mentioned process cannot be used.
Every voting will have its own specifics and it is necessary to have the entire procedure well-set with well-prepared documentation. Therefore, if you need to convene the general meeting or members’ meeting, we recommend you to get the documentation tailor-made for your specific needs and situation, otherwise you risk an invalidity of the resolutions of the decision-making body, which can have, especially in the case of the financial statement, very unpleasant consequences.
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