Decalogue of corporate measures established during the state of alert caused by the Coronavirus
On March 18, 2020, Royal Decree Law 8/2020 of March 17, on urgent extraordinary measures to deal with the economic and social impact of COVID-19 (“RDL 8/2020“) came into force. This Royal Decree-Law, among other things, set a series of measures that affect companies in the corporate sphere itself (ie. holding of general meetings of shareholders/shareholders and/or the board of directors, preparation and approval of annual accounts, etc.).
The measures approved in the aforementioned RDL 8/2020 will remain in force for a period of one month from its entry into force (ie. until 18 April 2020), without prejudice to the possibility that, following an assessment of the situation, their duration may be extended by the Government by means of a Royal Decree-Law. Notwithstanding the above, those measures provided for in RDL 8/2020 that are of a fixed term shall be subject to it.
Main measures adopted:
- During the state of alarm, meetings of the governing and administrative bodies of companies, cooperatives, associations and foundations may be held by videoconference to ensure authenticity and bilateral or plurilateral connection in real time with image and sound of those attending remotely.
- Likewise, during the state of alarm, the resolutions of the governing and administrative bodies of the companies, cooperatives, associations and foundations may be adopted by written vote and without a meeting whenever the president so decides and must be adopted when at least two of the members of the body so request.
- The period of three months from the end of the financial year for the preparation of the annual accounts by the administrative bodies is suspended until the end of the state of alarm, and is resumed for another three months from that date.
- If, on the date of the declaration of the state of alert, the administrative body has already prepared the annual accounts for the previous financial year, the period for the accounting verification of these accounts, if the audit is obligatory, will be understood to be extended by two months from the end of the state of alert.
- The ordinary general meeting to approve the accounts of the previous financial year shall necessarily be held within three months of the end of the period for drawing up the annual accounts. In other words, from the end of the state of alert, there are 3 months to prepare the annual accounts if they have not been prepared before the declaration of the state of alert and another 3 months for their approval.
- If the notice of the general meeting was published before the declaration of the state of alarm but the day of the meeting is later than the declaration of the state of alarm, the administrative body may change the place and time set for the meeting or revoke the agreement to call the meeting by means of a notice published at least forty-eight hours in advance on the company’s website and, if the company does not have a website, in the “Official State Gazette”. In the event of revocation of the resolution to call the meeting, the administrative body must call the meeting again within the month following the date on which the alarm condition ended.
- The public notary required to attend a general meeting of shareholders and to take the minutes of the meeting may use remote communication means in real time that adequately guarantee the fulfilment of the notary function.
- Even if there is a legal or statutory cause, in capital companies the shareholders may not exercise the right of separation until the end of the state of alarm and any extensions thereof that may be agreed.
- If, before the declaration of the state of alarm and during the validity of this state, a legal or statutory cause for the dissolution of the company arises, the legal period for the call by the administrative body of the general meeting of shareholders to adopt the agreement for the dissolution of the company or the agreements that have the purpose of preserving the cause, is suspended until the end of this state of alarm.
- If the legal or statutory cause for dissolution has occurred during the period of the state of alarm, the administrators will not be liable for the corporate debts incurred during that period.
2020 José Luis Vecilla Camazón. All rights reserved.