Virtual Shareholders’ Meetings Here to Stay

May 26, 2023 Benn-Ibler Rechtsanwälte

The Ministry of Justice’s (Bundesministerium der Justiz) draft on virtual meetings of joint-stock companies was submitted for review until 26 May 2013. Virtual shareholders’ meetings, which were introduced as a temporary solution during the Corona pandemic, can be a permanent option in the future. Unlike in the pandemic, however, future virtual shareholder meetings are only permissible if so stipulated in the articles of association or partnership agreements.

Due to COVID-19 contact restrictions it was necessary to allow for a special regulation which enabled companies to hold their meetings in a legally compliant yet practicable manner using technical means of communication such as video conferencing. The option of holding virtual general meetings will expire on 31 June 2023. Since this format was ultimately well received in practice, it is now intended to replace this temporary solution with a permanent legal framework known as the Virtual Shareholders’ Meetings Act.

This future federal law will apply to the general meetings of corporations, cooperatives, associations, mutual insurance societies, small mutual insurance societies, and savings banks.

The general rule for conducting such meetings is to have a simple virtual meeting by means of an acoustic and visual two-way connection in real time. Just as in a video conference, it is required that the participants be able to express their opinions and to cast their votes. This type of meeting is particularly suitable for a small number of participants. As a second possibility, moderated virtual meetings can be held, provided that there is a facilitator. Acoustic and visual two-way communication can be dispensed with. Visual and acoustic transmission in real time is sufficient. Shareholders cannot comment spontaneously, but rather they are given the opportunity to speak after having made a prior request, e.g. by e-mail. Only then may they comment via video communication. In order to give the shareholders as many attendance opportunities as possible, a third option is to hold hybrid meetings where individuals are given the choice of whether to participate physically or virtually.

In summary, virtual meetings must be organised in such a way that the exercise of rights by the participants is largely structured in the same way as it would be in the case of face-to-face meetings.

Ministerial Draft on the Virtual Shareholders’ Meetings Act – VirtGesG, 271/ME XXVII. GP (28.04.2023)