The Corporate Insolvency and Governance Bill received Royal Assent on 25 June and has now passed into law. While much of the Act focuses on changes, both permanent and temporary, to the UK’s insolvency regime, it also introduces some temporary relaxations of company law requirements around general meetings (including annual general meetings (AGMs)). We have reported on the changes in their proposed form in our recent article here – further guidance on these provisions was published jointly by the Department for Business, Energy and Industrial Strategy and the Financial Reporting Council, as we reported here. The provisions of the Act regarding AGMs has not been materially amended since the text of the Bill was originally published.
As such, with retrospective effect from 26 March 2020, any entity to which the Act applies (which includes companies incorporated under the Companies Act 2006 and its predecessors, building societies, registered co-operatives and community benefit societies) will be able to hold ‘closed’ general meetings. This will give those entities the ability to hold virtual general meetings/AGMs.
Companies and other qualifying bodies who intend to hold a general meeting in this period should:
- update their notice of general meeting to reflect these changes;
- update their standard proxy form and in particular the notes; and
- plan their approach to shareholder engagement – this will be particularly important in the absence of a face-to-face general meeting/AGM which may typically be a key channel for shareholder engagement for many companies.
The Government has published a guidance page for the Act which can be found here.
Watch out for further updates from the Burges Salmon team regarding the any updates made to the Act during its passage through Parliament which relate to changes to insolvency law – click here for our report on the proposed changes on 8 June.
Written by Gregory Nash.