Extraordinary corporate rules have been reintroduced, for the time being until 08 February, 2021, due to the second wave of COVID-19 and in order to provide continuous operation of companies despite the restrictive provisions.
The special legislation for companies shall apply primarily in cases when epidemiological measures hinder members of the company in taking part in decision-making. Since, unlike in the first wave of the coronavirus, no general lockdown has been introduced, the legislation may be applicable when the member is obliged to self-isolate or the session of the decision-making body must be convened (e.g. due to a member located in a different time-zone) for a time during the night curfew. However, even in these cases no special rules must apply if each member of the company is also an employee of the company or is obliged to work in person under the memorandum of association since any form of performing work is an exemption from the night curfew.
Instead of personal participation, it is possible to make a decision in the following two ways:
a) by holding a meeting using an electronic means of communication, or
b) a decision may also be made in writing upon the initiative of the management, provided that this is not precluded by the statutory provision for the given company form.
These possibilities also exist if the memorandum of association of the entity does not provide for it or provides otherwise.
In the case of an entity with up to 5 members, the modalities and conditions for decision-making shall be defined in such a way that all members can participate. In companies with more than 5 members and up to 10 members, the members with the majority of votes must request the holding of a ‘remote general meeting’ and, in the case of companies with more than 10 members, the management may also initiate it.
If none of the above methods are possible, e.g. in a company with up to 5 members (with different residences) one of the members cannot vote in writing or online, or in a company with 5-10 members, the majority of votes do not consent to the holding of a ‘remote general meeting’, in the following cases the management may also decide: to accept the annual report or to decide on urgent matters necessary (i) to maintain the lawful operation of the entity, (ii) to manage the situation due to the state of danger or (iii) in the course of sound and responsible management, but even in such cases they may not amend the company’s articles of association; decide on the dissolution, transformation, merger or division of the company; or decide on the reduction of the subscribed capital, and they may decide on refilling of capital only in certain cases.
The managing directors must ensure by all available means that the members get informed of the decision. The member (s) holding more than 25% of the votes may object to the proposed resolution of the management, and if the proportion of those who object reaches 51%, no decision may be taken. In lack of such objection, the decision may be enforced but it shall be included in the agenda of the extraordinary session that shall be convened within 90 days from the end of the state of danger.
If the ‘remote general meeting’ is not regulated in the company’s memorandum of association, or it contains a different regulation, the management (in the case of multiple general managers, the person exercising the employer’s rights) is entitled to lay down the rules for distance voting by doing everything in their power in order to provide members with information and documents related to decision-making and to be informed of the decisions taken.
Thus, detailed information on the agenda cannot be dispensed with and the draft decision must be communicated to the member. (According to the Civil Code, the agenda must be indicated in the invitation in such detail that those entitled to vote can form their position on the topics to be discussed.)
In the case of a meeting by electronic means, it shall be specified which programs, applications, devices may be used and how the identity is to be verified in the event that the management does not personally know the members (or their representatives).
In the case of a written decision, at least 15 days shall be allowed for the vote to be taken, and a vote shall be valid if at least as many votes are received during that period as would be required for a quorum to be held. A member’s vote is valid if it clearly identifies the member’s name (name, residence or registered office, in the case of an organization, the name of the representative), the indication of the draft resolution put to the vote and the vote cast for it. A legal entity member may send his vote only with a high-security electronic signature based on a qualified certificate, or by a document authentication service based on identification. On the other hand, private individuals may even vote via simple e-mail if the e-mail vote contains the above credentials. In the case of a written decision, members may not initiate a meeting or hold it by electronic means. In the case of a decision in writing, members may not initiate a meeting or hold it by electronic means. For managers of a company, we therefore advise to give preference to organizing recorded videoconferences in order to avoid future disputes.
The above rules shall apply to the notification and attendance of members of the supervisory board and permanent auditor of the legal entity.
Minutes shall be taken of the meeting held (prepared and signed by the designated manager) and this shall record the circumstances under which the meeting was held. An attendance form need not be prepared, but the minutes must include the details of the members attending the meeting online.
The regulation also lays down special rules for elected officials of the company. Should the term of office of a managing director, member of the supervisory board or permanent auditor expire during the state of danger, the term of office of that person shall be extended without a separate decision until the 90th day after the end of the state of danger, during which time the elected official shall continue to perform his duties. In other words, it is not necessary for the company to hold a meeting simply because the term of office has expired. Of course, even in an emergency, it is possible for the company to recall the official, and the above rule does not apply either if the official dies, his legal capacity becomes limited, or there is a conflict of interest or exclusion.