Companies Act amendments to facilitate hybrid or virtual annual meetings
Restrictions imposed in relation to public gatherings to preserve the health and safety of the public under the Disaster Risk Management Act enforcement measures have prevented many companies from holding annual general meetings, as they have more than the permitted number of shareholders allowed for public gatherings.
In light of this, steps are now being taken to lawfully allow companies to hold hybrid meetings, a combination of in-person and virtual meetings, or a virtual-only meeting.
Under existing companies legislation, annual meetings must be held in a physical location within months of the end of the financial year.
But, many companies face significant challenges in holding in-person general meetings in compliance with section 126(1) of the Companies Act, and as a result, these companies face the possibility of sanctions being imposed.
To solve the dilemma, an amendment to the Companies Act has been piloted. The Bill was passed in Parliament on Wednesday, October 8, and will now be advanced to the Senate.
Minister of the Ministry of Industry, Investment and Commerce Audley Shaw indicated that pending amendments to the Companies Act will strengthen the existing legislation to facilitate business.
The initiative, Shaw outlined, falls under mandates instituted by Prime Minister Andrew Holness under The Disaster Risk Management (Enforcement Measures) Orders, to protect the health and safety of Jamaicans in light of the novel coronavirus pandemic.
The amendments of the Companies Act will lawfully allow companies to hold hybrid meetings, a combination of in person and virtual meetings, or a virtual-only meetings.
In a press release, Minister
Shaw stated that given the need for continuity in the business sector despite the pandemic, and the ministry’s role in facilitating an enabling business environment, the changes are being pursued.
The specific amendments will allow for the holding of any general meeting, such as an annual general meeting or an extraordinary general meeting as a virtual-only meeting, completely electronic or a hybrid meeting — a combination of in-person and virtual — where this is not expressly prohibited by the articles of a company.
Further, it was outlined, the amendments will empower the Registrar of Companies to grant an extension of time for the holding of an annual general meeting.
This will be facilitated by the application of a director of a company or any member who is entitled to vote at the meeting, where an order has been made under the Disaster Risk Management Act, or a proclamation has been made by the governor general declaring a period of public disaster or a period of public emergency.
The amendment will also provide for conditions necessary for the holding of hybrid meetings or completely electronic meetings which will ensure participation of all members in attendance.
Minister Shaw said that the amendments promise a permanent solution for companies to be able to hold meetings required by law in the face of any future disasters or emergencies which may result in restrictions in public gatherings.
Speaking on the amendments Minister Shaw said, “The unprecedented COVID-19 pandemic has undoubtedly changed the way we do business. The new business norms require expeditious amendments to some legislation and regulations for the continuation of shrewd business governance and operation.”