On 10 July 2020, the Companies Act (Public Companies – Annual General Meetings) Regulations (the “Regulations”) were published primarily to regulate the situation whereby Annual General Meetings (“AGMs”) by public companies had to be postponed in the light of the COVID-19 pandemic.
In terms of a Circular issued by the Malta Business Registry on the same date, the Regulations are applicable to all public companies whose AGMs could not be held and had to be postponed due to the restrictions imposed by the Superintendent of Public Health.
The Regulations extend the period of fifteen (15) months set out in Section 128(1) of the Companies Act (Chapter 386 of the Laws of Malta) (the “Companies Act”) by a five (5) month period and similarly the seven (7) month period from the end of the financial year for the laying and approval by the company in the general meeting of the company’s accounts set out in Section 182(2)(b) of the Companies Act has been extended by five (5) months. Thus, a public company with a 31 December year end which is otherwise required to hold its annual general meeting by end July, now has until end December 2020 to hold its AGM. The period of forty-two (42) days to file the accounts with the Malta Business Registry in terms of Section 183 of the Companies Act will commence to run as from the date of the holding of the AGM.
The Regulations distinguish between remote and virtual AGMs and extraordinary general meetings (“EGMs”). The Regulations specify that AGMs or EGMs can be validly held remotely where:
- Shareholders appoint the chairman of the meeting as their proxy and indicate the manner in which such proxy is to vote for each resolution which is being put forward on the agenda;
- The quorum of such meeting is to remain the same as that set out in the Memorandum and Articles of Association of the company, the quorum may consist of the persons present by proxy and no physical attendance of shareholders is allowed at the meeting;
- Shareholders are given sufficient time to address any issues related to the agenda and to be able to submit questions in writing (including by electronic means) up to 48 hours prior to the meeting. This invitation to ask questions is to be contained in the notice convening the meeting. Questions raised are to be answered by the directors/persons delegated for this purpose and the Company shall upload answers on the Company’s website within 48 hours from when the meeting was held.
Where the Articles of Association of a company so provide, an AGM or an EGM can be held virtually provided that the notice of the meeting should specify that the virtual means being used, whilst communicating the procedure as to how members are to attend, vote and participate in discussions.
In order to make use of the extension allowed by the Regulations, companies must deliver a notice (the AGM Form attached to the Regulations) to the Malta Business Registry at least one month before the AGM. A penalty of €500 is applicable in case of default.