Allowed on an exceptional basis: the virtual general meeting

Recently, several large German corporations have postponed their annual general meeting indefinitely due to the corona crisis. In order to enable publicly traded companies to remain capable of acting and, for example, to decide on capital measures and profit distributions, the legislator has considerably relaxed the requirements for the organisation and holding of general meetings for this year. The new rules apply to German public limited companies (AG), Societas Europaea (SE) and partnerships limited by shares (KGaA). They do not have to be listed on a stock exchange. The new law shall enter into force on the day after its promulgation in the Federal Law Gazette, which is expected to take place shortly.


Virtual general meeting

In contrast to the usual situation, this time physical presence is not required in order for companies to hold a general meeting. The board of directors may issue the necessary instructions with the approval of the supervisory board. This does not have to be regulated in the articles of association.

A virtual general meeting may be held under the following conditions:

  • transmission of picture and sound of the whole meeting, i.e. also the general debate;
  • it must be possible to vote electronically and on paper;
  • shareholders must have the possibility to hand in questions;
  • shareholders that exercised their voting right may declare an objection electronically until the end of the meeting.

Restricted obligation to provide information

The company may determine that questions must be submitted at least two days before the meeting, for example by sending an e-mail to an e-mail address set up for this purpose. Contrary to standard practice, the shareholders do not have a real right to information. The board of directors answers questions at its discretion. The board is not obliged to answer all questions. The board may answer frequently asked questions on the website and other questions in the course of the meeting.

Restricted right to contest

The legislator offers hardly any opportunity to contest the instructions issued in connection with the holding of the virtual general meeting. This also applies to the potential violation of the limited obligation of the board to provide information. Intentional violations of the statutory provisions may, however, constitute grounds for contesting the resolutions adopted.

Invitation with shortened notice period

The company may, in exceptional cases, invite to attend the general meeting with a shortened notice period of 21 days (otherwise 30 days).

Suspension of the 8-month period

In contrast to the usual situation, this year's annual general meeting does not have to take place by 30 August, but can still be held until 31 December 2020. This does not apply to the SE, whose annual general meeting must be held within six months following the end of the financial year in accordance with EU law.

Practical advice

Many larger companies already broadcast the speech of their chairman of the board over the Internet, but switch off the camera afterwards. This year, the entire general meeting, which usually lasts several hours, must be transmitted. Companies should ensure in good time that the technology required for image streaming is available. The network load is very high at the moment, as is well known.

The new rules create a largely secure legal framework for holding virtual general meetings during the corona crisis. However, the companies must expect that individual resolutions will nevertheless be challenged. Careful preparation and holding of the general meetings are therefore essential.

Luther has many years of experience in assisting with general meetings of listed and non-listed companies.

Stephan Gittermann

Stephan Gittermann
Frankfurt a.M.
+49 69 27229 24970