On the 10th July 2020, the Companies Act (Public Companies – Annual General Meetings) Regulations, 2020 were published by virtue of L.N. 288 of 2020 (the “Regulations”). The Regulations apply to all public companies and feature one component of the Maltese legislator’s response to the COVID-19 pandemic and its effect on Maltese listed companies.
The main changes brought about to the Companies Act (Chapter 386 of the laws of Malta) (the “Act”) in terms of the Regulations are the following:
Extension of the period for holding an AGM (reg. 4)
The Regulations provide for an extension of the 15 month period referring to in article 128(1) of the Act by five months. Article 128 of the Act requires that no more than 15 months elapse between the date of holding of one AGM and the next.
Holding of AGMs/ EGMs remotely (reg. 5)
The Regulations introduce the possibility of AGMs or EGMs of a public company to be validly held remotely, notwithstanding anything contained in the memorandum and articles of association (“M&A”) of the company in question.
In the event that the AGM or EGM in question is convened remotely, the following rules shall apply:
- The quorum applicable for the holding of the meeting shall be that set out in the M&A of the company, provided that notwithstanding any provision of the M&A, the quorum may consist of a person or persons who are present at a meeting by proxy and no physical attendance of shareholders shall be allowed at the meeting;
- Shareholders shall only be able to appoint the chairman of the meeting as their proxy and may indicate on the form of proxy how the chairman, as proxy, is to vote on each resolution put to the meeting;
- Sufficient time must be allowed for shareholders to ask questions which are pertinent and related to the items on the agenda of the meeting, in advance of the meeting, whether by electronic means or by letter addressed to the company. Such questions will be answered by the directors or by such person as the directors may delegate for that purpose;
- An invitation to ask questions is to be contained in the notice convening the AGM / EGM and shareholders shall be allowed to submit such questions in writing up to 48 hours prior to the meeting. The company shall provide an answer to the questions on its website within 48 hours from the termination of the meeting. The company shall be permitted to provide an overall answer to questions having the same content and the company may take reasonable measures to ensure the identification of the shareholder or the proxy.
Holding of AGMs / EGMs virtually (reg. 6)
Notwithstanding the above, if the M&As of the company in question so provide, the AGM / EGM may be held virtually, provided that in the notice calling the meeting, there shall appear, with reasonable prominence, the means used for the virtual meeting and the procedure of how any member: (i) is entitled to attend and vote; (ii) can participate in the discussion; and (iii) can vote.
Proxies given by electronic means (reg. 7)
Reference to the term ‘in writing’ set out in article 133(2) of the Act has been clarified to also refer to proxies given by electronic means.
Extension of period for laying accounts before the AGM (reg.8)
The Regulations extend the following periods in connection with shareholder approval of the company’s accounts:
- The seven month period set out in article 182(2)(b) of the Act, being the period following each particular accounting reference period by when the accounts of a public company are to be laid before and approved by the shareholders of the company, has been extended by five months. In practice, for a public company having a December 31st year end, for the financial year ended 31st December 2019, such company now has until 31st December 2020 for its shareholders to approve such accounts;
- The 42 day period referred to in article 183 of the Act relating to the registration, with the Malta Business Registry, of the accounts (following shareholder approval), together with the auditor’s report and the directors’ report thereon, shall start to run from the extended period as set out above. Taking the example set out above, the 42 day period shall commence to run from 1st January 2021 and shall lapse on the 11th February 2021.
A company may still avail itself of the extended timeframe set out in the Regulations notwithstanding that a shorter period may be established in its M&As.
Any company wishing to avail itself of the extended timeframes set out in regulation 8 of the Regulations is to deliver to the Registrar of Companies a notice in the form set out in the schedule to the Regulations. Such notice is to be given one month before the AGM in question. Any default in doing so shall render every officer of the company liable to a penalty of €500.
For further information on the Regulations and their impact on Maltese listed companies, please contact us on firstname.lastname@example.org.