Postponing AGMs during the pandemic

Legislation to assist companies with holding their AGMs during the coronavirus pandemic, the Corporate Insolvency and Governance Bill has received royal assent, and is now the Corporate Insolvency and Governance Act 2020, with almost all its provisions commencing on 26 June 2020.

The legislation was confirmed in a letter from Baroness Bloomfield as applying to charitable companies, their subsidiaries, mutuals, Charitable Incorporated Organisations (CIOs) as well as social enterprises structured as companies and Community Interest Companies (CICs).

It is not intended to apply to charities incorporated and regulated by an Act of Parliament or by royal charter, or to unincorporated charities such as charitable trusts and charitable associations.
Trustees of unincorporated charities may, however, be able to alter the requirements in their governing documents as to the timing of AGMs.

Charities governed by an Act of Parliament or by royal charter will have to rely on, as Baroness Bloomfield’s letter states, the Charity Commission’s indication that it will take “a pragmatic and proportionate approach where members’ meetings need to be postponed or held virtually in order to comply with social distancing, even where this may appear to be contrary to the rules of the charity’s governing document.”

Helpfully, the Commission has swiftly updated its Coronavirus (Covid-19) guidance for the sector to summarise the key points of interest in the legislation for charities in relation to postponing AGMS and other meetings, and insolvency help for charitable companies and CIOs.

Postponing AGMs and other meetings

The guidance states that the Act allows charitable companies and CIOs to delay any AGM that had to be held between 26 March and 30 September this year until 30 September 2020 at the latest. It is possible the Government may extend this deadline further, if necessary. The provisions of the Act effectively override any timing requirements included in the organisation’s governing document.
In the case of members’ meetings held between 26 March and 30 September this year by charitable companies, CIOs, or exempt charities that are community benefit societies or friendly societies, the Act also provides in relation to such meetings that:

  • they can be held by phone or video, even if the governing document requires them to be held physically face-to-face;
  • the charity or other organisation can require members’ voting to be carried out electronically, or by other means such as post; and
  • members will not have a right to attend the meeting in person, or to participate in the meeting beyond exercising their right to vote.

Any decision to take advantage of these provisions of the Act should be recorded in the minutes of the charity appropriately, and all other meeting requirements should be met.

Again, these provisions in the Act will be available until 30 September this year, but the Government may extend the deadline further if necessary.


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