Novelties in corporate issues during the state of alert caused by the coronavirus: Royal Decree Law 11/2020 of 31 March

As an update to my post Decalogue of corporate measures established during the state of alert caused by the Coronavirus, I hereby inform you of the amendments introduced by Royal Decree Law 11/2020, of 31 March, published in BOE on 1 April 2020, to the measures applicable to companies in the field of company law introduced by Royal Decree Law 8/2020, of 17 March, on urgent extraordinary measures to deal with the economic and social impact of the COVID-19.

The amendments introduced are as follows:

1. Due to the doubts that have arisen, it is clarified that the possibility of holding meetings by videoconference or multiple telephone conference is extended not only to the administrative bodies but also to shareholders general meetings, provided that all persons entitled to attend or those representing them have the necessary means, the secretary of the body recognises their identity and states this in the minutes, which shall be immediately sent to the e-mail addresses.

2. It is clarified that despite the suspension and extension for the formulation of accounts, the formulation of the accounts by the administrative body during the state of alarm is valid and it can also be verified in the accounts within the legally established period or benefit from the extension of two months from the end of the state of alarm.

3. In line with the previous point, it is clarified that the accounting verification period is extended by two months from the end of the alarm state, not only for the accounts formulated at the date of the declaration of the alarm state but also for those formulated during its validity.

4. As a novelty, it is possible to replace the proposal for the application of the result contained in the report with another proposal for companies which, having drawn up their accounts, call an ordinary general meeting as from the entry into force of this provision.

In this case, the administrative body must justify, based on the situation created by COVID-19, the replacement of the proposal for the application of the result, which must also be accompanied by a letter from the auditor stating that he would not have modified his audit opinion if he had known of the new proposal at the time of its signature.

Likewise, in the case of companies whose ordinary general meeting has been called, the administrative body may withdraw the proposal for the application of the result from the agenda for the purpose of submitting a new proposal to the approval of a general meeting, which must also be held within the period legally established for holding the ordinary general meeting. The decision of the administrative body shall be published before the holding of the general meeting already convened. In relation to the new proposal, the requirements for justification, written by the auditor, indicated in the previous paragraph, must be fulfilled. The certification of the administrative body for the purposes of the deposit of accounts will be limited, if appropriate, to the approval of the annual accounts, with complementary certification regarding the approval of the proposal for the application of the result being presented subsequently to the Commercial Registry.

April 2020
2020 José Luis Vecilla Camazón. All rights reserved

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