Last week, BEIS and FRC published a further set of Q&As on the Government’s awaited legislation to assist companies with the difficulties of holding AGMS during the pandemic.
The Q&As confirm that the proposed legislation is intended to apply to AGMs held by not only companies (including charitable companies), but also mutuals and Charitable Incorporated Organisations (CIOs).
The new legislation intends to provide these organisations with greater flexibility in holding their AGMs than they might otherwise have at present. It should allow them temporarily to postpone AGMs, and to override certain requirements in their constitutional documents or rules relating to the mode of those meetings – for example, removing the need for a physical meeting.
The new Q&As make clear that “the announcement and the further detail provided in the Q&A below reflects what Government intends to deliver”, but that the new legislation is still subject to the approval of parliament.
Charities wishing to take advantage of the provisions of the government's proposed legislation in arranging their AGMs should note the following points, in particular, from the Q&As:
- The legislation is intended to apply retrospectively from 26 March, but cannot be presumed to apply until the legislation is passed by Parliament – so companies wanting to take advantage of the new legislation in arranging their AGMs should in the meantime:
- give notice of any meeting as usual if the last date for doing so occurs before the legislation is passed, while keeping those notified informed of the company’s plans to postpone the meeting once the legislation is passed; and
- not assume that meetings held on the basis of proposed provisions of the new legislation but before the legislation is passed are valid.
- The flexibilities provided by the legislation are intended to be available until the end of September this year, although the Q&As do not rule out the Government making regulations to give further extensions if appropriate.
- Authorisations obtained at last year’s AGM may not remain valid if this year’s AGM is postponed – organisations will need to check the specific requirements of their Articles or rules.
For more on issues relating to the pandemic, head over to our Coronavirus hub.
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