Germany: Virtual General Meetings Are Here to Stay

Sept 30, 2022 Benn-Ibler Rechtsanwälte

At the beginning of July this year, the German Bundestag adopted a bill on virtual general meetings of public limited companies. Online general meetings were initially introduced for a limited term due to the Covid-19 pandemic, but are now to become a permanent option. This also applies to general meetings of cooperatives.

Due to the pandemic, it had been necessary to create a temporary regulation that allowed public limited companies to hold their meetings in a legal and practical manner despite Covid-19 contact restrictions. However, the possibility of holding virtual general meetings terminated on 31 August 2022. As the virtual meeting format had been well received, this temporary option for meetings has now been replaced by a permanent legal framework with pertinent legislation having been passed in July.

The amendment to the German Stock Corporation Act allows companies to hold their general meetings digitally. However, this provision in company articles of association is tied to certain requirements and must be updated every five years. For example, virtual meetings must be organised in such a way that shareholders can exercise their rights in much the same way as they can in face-to-face meetings. For instance, full video and audio transmissions of the proceedings must be provided. Since communication and decision-making processes are conducted in a different format during virtual meetings, shareholders were given the added option of submitting their comments ahead of time. This had resulted in a significantly increased number of shareholder questions as well as an improvement in the quality of the answers to such questions. In contrast to previous regulations, the new meeting rules now allow shareholders to make use of their right to speak or to spontaneously submit countermotions without having to submit these ahead of time.

The main complaint about the amended rules now is the restriction of attendees’ blanket right to ask questions. This means that only follow-up questions to previously asked questions may be asked. It will not be possible to address developments occurring in the course of the meeting.

Due to the pandemic, Austria had also created the temporary possibility of holding virtual general meetings. According to Sect. 5 (5) COVID-19-GesV, this will still be possible until 31 December 2022.

Bundestag Drucksache 20/1738 (10 May 2022)