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Coronavirus – Shareholders’ meetings and supervisory board meetings - Austria

  • Austria
  • Coronavirus
  • Coronavirus - Country overview

26-03-2020

The current effects of the crisis present companies with a variety of difficulties that must be overcome in a short period of time. With regard to company law, until recently the question arose as to whether shareholders' meetings and supervisory board meetings may be held at all on the basis of the measures adopted by the government (such as the ban on gatherings). In order to eliminate this legal uncertainty and to facilitate the holding of shareholders' meetings and meetings of board members, the legislator has enacted the COVID-19 Act (COVID-19-GesG). This came into force on 22 March 2020 22.03.2020 and will expire on 31 March 2020.

Holding of meetings

The new law stipulates, inter alia, the following:

• For the duration of measures taken to prevent the dissemination of COVID-19 in accordance with the COVID-19 Measures Act, meetings of shareholders and board members of corporations, partnerships, cooperatives and private foundations may be held without the physical presence of the participants

• The Federal Minister of Justice has been authorised to issue a decree laying down more detailed regulations concerning the holding of the aforementioned meetings, which will ensure a comparable quality of decision-making

The decisive factor in this context is that the provisions concerning the holding of meetings as special legal regulations take precedence over deviating provisions. This means that meetings without physical presence, such as by means of qualified video conferences, are possible even if the articles of association or statutes state otherwise.

Fortunately, it has already been possible to hold shareholders' meetings using technical means of communication in compliance with certain rules. However, this was only possible if a corresponding provision was anchored in the articles of association or - with the exception of the general meeting of the AG - all shareholders agreed.

Supervisory Board meetings were also already possible in the same way if this was provided for in the Articles of Association or by the Supervisory Board and no member of the Supervisory Board objected in a specific case.

In practice, "qualified video conferencing" has established itself in this context. This requires mutual visibility and audibility for all participants as well as the authentic recording of details of human facial expressions, gestures and intonation. Furthermore, it must be protected against unauthorized access.

Extension of the deadline for the Annual General Meeting

There is a further facilitation for AGM’s. The period for holding ordinary general meetings of stock corporations has been extended from 8 to 12 months in deviation from §104 (1) AktG.

Outlook

It remains to be seen how the Minister of Justice will make use of her right to issue regulations.

In any case, the current situation shows how crucial it is for companies to be able to react quickly in times of crisis. In this respect, we very much welcome the relief that has been discussed. Hopefully, this path towards strengthening digitization will continue to be pursued consistently after the crisis.

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