Temporary supporting measures for the functioning of statutory bodies of companies regulated by Law No. 31/2990 as a result of the new social background created by the COVID-19 pandemic
On 8 May 2020, Government Emergency Ordinance No. 62 (“GEO 62/2020”) was published in the Romanian Official Gazette and entered into force as of the publication date. It deals with the adoption of measures in the corporate arena in order to conduct the meetings of statutory bodies and is aimed at implementing certain measures by way of derogation from Companies Law No. 31/1990 (“Companies Law”).
In the context of the COVID-19 pandemic, protecting the economic system and continuing production, trade and consumption activities is imperative.
In light of the measures taken by the national authorities regarding limiting the movement of people, social distancing and restricting the conduct of activities involving groups of people, adopting the temporary measures provided by GEO 62/2020 to facilitate the day-to-day business activities of certain legal entities represents an important step towards the functioning of the national economy.
Therefore, GEO 62/2020 is aimed primarily at implementing the digitalisation of convening and conducting meetings of a company’s shareholders and statutory bodies.
GEO 62/2020 applies to the general meeting of shareholders (“General Meetings”) and the meetings of statutory bodies, as well as to the meeting of bond holders, which were convened and held during the state of emergency established in Romania on 16 March 2020 and terminated on 15 May 2020, as well as to the following categories of General Meetings:
- meetings convened prior to GEO 62/2020 coming into force and held during the state of emergency;
- meetings convened during the state of emergency and held following its termination; and
- meetings convened and held within 2 months of the termination of the state of emergency, including the meetings of the bond holders.
Regarding meetings of the management/ supervisory/ directorate bodies, GEO 62/2020 limits the applicability of its provisions to meetings held during the state of emergency and meetings held within 30 days of its termination.
The provisions of GEO 62/2020 do not apply to companies governed by Law No. 24/2017 on issues of financial instruments and market operations.
II. MEASURES RELATING TO GENERAL MEETINGS
1. Convening Notice
GEO 62/2020 provides the ability to convene a General Meeting by any means of distance communication which shall ensure the transmission of the text, leaving it up to the competent statutory body to choose an appropriate method. A postal or electronic address or any other contact details related to correspondence with the company may be used in this respect, provided that the shareholders have communicated such information to the statutory bodies. The convening notice may also be sent to the addresses of the shareholders listed in the shareholders’ register.
With respect to convening by electronic means, GEO 62/2020 appears to implement a derogation from the obligation to attach an extended electronic signature, limiting the requirement only to persons holding such signature.
The convening notice shall be published on the website of the company, provided that the company has one, and shall also be communicated by electronic mail if the email addresses of the shareholders are known.
The convening notice shall contain all information relating to the date and time of the meeting, the form of participation, the means of conducting the meeting and the means of providing access to the shareholders, the place where any powers of attorney must be sent (if this is the case), as well as the procedures relating to exercising voting rights.
In addition, GEO 62/2020 provides:
(i) the possibility for the competent statutory body to modify the date and/or time and the place for holding the General Meeting, for reasons relating to exceptional circumstances following measures taken by the authorities for limiting the spread of COVID-19.
In this case, the competent statutory body shall inform the shareholders no later than 5 days prior to the original date of the General Meeting with respect to the amendments, the means of conducting the meeting and the procedures relating to exercising voting right.
If the shareholders do not submit new ballot papers or new powers of attorney, the original submitted ones shall remain valid; and
(ii) the possibility to revoke the convening notices relating to General Meetings which were issued prior to GEO 62/2020 coming into force and which may not now be held under the new requirements or at the company’s headquarters (in the latter case, with the observance of the measures taken by the authorities in order to prevent COVID-19 infection).
2. Meeting Agenda
GEO 62/2020 eliminates the obligation to provide the shareholders with information and documents relating to the items on the meeting agenda at the company’s registered office. Such information may be communicated by means of posting it on the company’s website, if the company has one.
In addition to the measures taken with respect to the convening notice, GEO 62/2020 sets forth the possibility of communicating any addition to the meeting agenda by any means of communication at distance which ensures text transmission.
3. Conducting the General Meeting
3.1. The term for assembly
Under Companies Law, General Meetings shall be held no later than 5 months after the end of the financial year. GEO 62/2020 extends this term for ordinary General Meetings until 31 July 2020.
In addition, until 31 July 2020, by way of derogation from the provisions of Article 15324 para. (1) of the Companies Law, the board of directors or the management board shall not be bound by the obligation to convene an extraordinary General Meeting if they acknowledge that the net assets of the company fall below half the value of the subscribed share capital.
3.2. Place of and participation in the General Meeting
GEO 62/2020 provides the ability to hold General Meetings by direct distance communication i.e. correspondence or by electronic means irrespective of the provisions of the articles of association on such matters, and even in cases where the articles of association prohibit the use of such means. The decision on the choice of which one of the above-mentioned means for holding the General Meetings is used belongs to the competent statutory body.
Electronic means of communication at distance must fulfill the following technical requirements:
- compatibility with the most common fixed or mobile access technologies, with as many operating systems as possible and connection to fixed or mobile public electronic communication networks;
- identifying the participants and ensuring their actual participation at the meeting;
- continuous real-time transmission, recording and archiving of the General Meeting;
- exercising and recording the voting rights within the General Meeting; and
- subsequent verification of the means of exercising the voting rights.
In addition, pursuant to the provision of GEO 62/2020:
(i) Participation by representatives shall be subject to sending or submitting powers of attorney in this respect no later than the date of the meeting either (a) in original form to the place indicated by the convening notice, by registered post, mail or courier, or (b) by electronic mail, provided that the powers of attorney are signed with an extended electronic signature.
(ii) By way of derogation from the provisions of the Companies Law regarding physical presence, GEO 62/2020 also removes the obligation for the directors/members of the board of directors/members of the supervisory board to participate to the General Meeting.
According to GEO 62/2020, the shareholders may vote by correspondence, in the manner specified in the convening notice, i.e. by registered post, mail, courier or by electronic mail, having incorporated or attached or logically associated an extended electronic signature, and provided that the vote is received by the company prior to the date of the meeting.
With respect to matters requiring a secret vote, GEO 62/2020 requires the competent statutory body to ensure, by appropriate means, that the confidentiality requirements of such votes are observed.
Therefore, where the General Meeting is held with respect to (i) the appointment or dismissal of the members of the board of directors/members of the supervisory board or (ii) the appointment, dismissal or resignation of the financial auditors or (iii) the liability of the management and supervisory members of the company, the competent statutory bodies shall ensure that secret voting is exercised by a means which allows the unveiling of such votes only to the people responsible for counting and validating the votes of the General Meeting.
3.4. Minutes of the General Meetings
The minutes of General Meetings conducted under the special conditions set out in GEO 62/2020 shall include certain mandatory elements, which differ according to the means of conducting the meeting (i.e. whether it was by correspondence, by tele-conference or by video conference).
We note that such provisions refer to both shareholders of joint-stock companies and limited liability companies, therefore the obligation to draft and sign the minutes of the General Meetings also appears to be applicable to both joint-stock companies and limited liability companies, provided that the meetings are convened or conducted under the special conditions provided for by GEO 62/2020.
3.5. Resolutions of the General Meetings
Under GEO 62/2020, the resolutions of General Meetings shall be drafted and signed by the competent statutory body (i.e. the president of the board of directors, the directors having representation prerogatives, the president of the management board or, where the latter are unable to fulfill their obligations, their representative) by means of a handwritten signature or, alternatively, with an extended electronic signature.
4. General Meetings held during the state of emergency and prior to the enactment of GEO 62/2020
Aimed at protecting the economic environment, GEO 62/2020 sets out special requirements relating to the validity of resolutions of General Meetings held during the state of emergency but prior to enactment of GEO 62/2020, namely:
(i) The resolutions of such General Meetings cannot be declared void for failure to comply with the procedures for holding the meetings or the procedures for exercising voting rights, provided that such General Meetings have been held in accordance with the procedures set out in GEO 62/2020, including with respect to exercising voting rights and the unanimous consent of the shareholders.
(ii) Exercising voting rights within the General Meeting shall be construed as granting consent with respect to holding the meeting pursuant to the procedures set out in GEO 62/2020.
III. MEASURES RELATING TO THE MEETINGS OF THE STATUTORY BODIES
GEO 62/2020 also sets out the possibility for the management, supervisory and/or directorate bodies to participate in the meeting by means of direct distance communication, irrespective of the object of the decision, as following:
(i) The competent statutory body shall choose the means of conducting the meeting and of exercising voting rights ensuring all relevant parties can participate properly. Therefore, the competent statutory body shall inform the other members regarding the means of participation at the meeting and the procedures for exercising voting rights by any means ensuring the transmission of text, pursuant to GEO 62/2020.
(ii) GEO 62/2020 provides that the electronic means of distance communication used during the meetings of the statutory bodies must fulfill certain technical requirements as regards (i) identification of the participants (ii) effective participation of the members, and (iii) continuous transmission of the deliberations.
 Established by the Decree of the President of Romania No. 195 dated 16 March 2020 and extended by Decree No. 240 dated 14 April 2020
 If the Board of Directors or the Directorate observes that, following certain losses ascertained by the annual financial statements approved pursuant to the legal requirements, the net assets of the company, determined by the difference between the total assets minus the debts, are amounting to less than half the value of the company’s subscribed share capital, then the Board of Directors or the Directorate shall convene immediately an extraordinary general meeting in order to decide whether the company should dissolve.