Holding of general meetings
It is already certain that the corona virus will in any case have an impact on this year's AGM season. According to section 104 (1) of the German Stock Corporation Act (AktG), the executive board must convene the annual general meeting annually within the first eight months of the financial year. The government has now extended this deadline to 12 months. However, if a postponement is not possible due to the current economic situation, alternatives must be considered. In principle, the options provided by law are (i) granting a power of attorney to a proxy (in principle uncertified) or (ii) holding electronically organised general meetings.
In public limited companies with a large number of shareholders, this measure alone makes it difficult to hold a general meeting. To make matters worse, far-reaching bans on the use of public spaces have also been enacted. Specifically, the 98th decree of the Federal Minister for Social Affairs, Health, Care and Consumer Protection according to § 2 line 1 of the COVID 19 Measures Act basically prohibited entering public places, with strictly defined exceptions. A general meeting is in principle not public, but entering public space must be justified. This is the case, for example, on the way to work. Whether this is also the case for the holding of a general meeting is unclear at present, but the answer is rather negative.
Also in the case of the general meeting, a distinction must be made between holding a general meeting (including a notary) and passing a written circular resolution pursuant to § 34 GmbHG. In principle, all essential resolutions of a GmbH can be passed as a circular resolution. Even if the content of the resolution had to be submitted to the company register in certified form (especially in the case of amendments to the articles of association), a circular resolution should be possible according to the prevailing opinion. On the other hand, according to § 36 para 2 GmbHG there is also the obligation to convene the general meeting once a year. Under normal circumstances, this should still be possible in the current year, but if the interests of the company (for example, due to the economic development) require a general meeting, it must be convened as soon as possible. The responsibility for this lies in principle with the management. Failure to do so, even or especially in the current situation, may constitute a breach of duty and grounds for dismissal, and in the case of employed managing directors, grounds for termination or even dismissal.
Supervisory Board meetings in the public limited companies
Section 94 para 3 AktG stipulates that the supervisory board must hold meetings at least four times per financial year. This could prove problematic due to the current situation. However, according to the prevailing legal opinion, meetings can be held through qualified video conferences. As already mentioned, however, the actual procedure remains open as long as the legislator has not enacted any regulations in this regard. Similarly, individual resolutions can also be concluded by telephone. Resolutions can be passed by telephone at any time.