In this article we will analyze, in relation to a recent resolution of the General Directorate of Legal Security and Public Faith of November 19, 2020 (BOE of December 7, 2020), the possibility that companies can take agreements without need to hold a meeting of the board of shareholders, meaning, without physically meeting the shareholders, expressing their vote in writing.
In addition, we will analyze other issues that are also resolved in the aforementioned resolution of the General Directorate that, although not inherent to that possibility of reaching agreements in writing and without a session, are also very interesting.
1. Possibility of taking agreements through a written vote of the shareholders and without a General Meeting session. Early voting remotely from members.
In principle, it is clear that a limited company can establish in its bylaws the possibility for partners to attend and vote by videoconference at the general meeting, as long as it is ensured that remote attendees have real-time news of what happens at the meeting and, in addition to that, they can intervene.
Likewise, it seems equally admissible that the bylaws provide that early remote voting is allowed at general meetings, or the agreement taken by the shareholders “in writing and without a session”, that is, without the need to formally attend personally a meeting, as long as: (i) all the partners express their agreement to adopt the resolutions without the need for a session; (ii) the matters on which the Board’s agreement is sought are subject to a simply affirmative or negative vote; (iii) communications are made in physical or electronic writing or by any other means of remote communication that duly guarantees the identity of the subject who makes it, as well as the integrity of its content; (iv) and there is a reliable record in the minutes of the procedure followed and the resolutions adopted, stating the identity of the partners, the agreement of all of them with the procedure, the system used to form the will of the Board and the vote cast by each partner.
These two possibilities discussed in the two preceding paragraphs are included in the law for public limited companies, provided that these possibilities are provided for in the bylaws.
2. Attending the General Meetings and voting by members during the coronavirus or Covid-19.
During the state of alarm decreed by reason of the health crisis derived from Covid-19, several regulations were issued in the form of Royal Decree-Law, among which the casting of the vote was regulated. In fact, article 40.1 of Royal Decree-Law 8/2020 allows the video or teleconference system not only to the administrative body, but also to the Board. However, article 40.2 does not include the possibility of applying the voting system in writing and without a session for holding shareholders’ meetings or to take agreements by the shareholders without actually attending physically the meeting, as established in Article 159 of the Capital Companies Law, as this would only be admissible if it were provided for in the bylaws.
This is the criterion of the General Directorate, which has declared that the conclusion that must be considered more adjusted to the literal and systematic interpretation of sections 1 and 2 of article 40 of Royal Decree-Law 8/2020 is the one that adjusts to its literal and systematic interpretation of such rules, which establish that this way of adopting resolutions by means of a written vote and at a distance and without the need for a meeting to be held is only foreseen for agreements of the direction bodies, but not for the general meeting of shareholders.
And the fact is that these articles mentioned in the preceding paragraph provide that, in the case of a collegiate administrative body –a Board of Directors– the members of this body can cast their vote in writing and from a distance and, likewise, agreements can be taken without need that the directors actually meet in a session of the Body.
The controversial issue here is that the notary authorizing the deed considered that, when article 40.1 of Royal Decree-Law 8/2020 refers to the “governing and administrative bodies”, it refers to the general meeting by the reference made to the “governing bodies”.
However, the General Directorate considers that this is not the case, but rather that the literal diction of the “governing and administrative bodies” of the law refers only to the Board of Directors, without the “governing bodies” including the shareholders general meeting. The General Directorate also says that this conclusion is the one that results from the literal, logical and semantic interpretation of the aforementioned article 40 in its original wording, which, moreover, has been confirmed by the legislator when this article was modified through final provision 1.13 of the Royal Decree-law 11/2020, by introducing a second paragraph to section 1 of the aforementioned article 40, to precisely allow general shareholders’ meetings to be held by video or by multiple telephone conference. It is understood that the modification with this precision would not have been necessary if the reference made to the governing bodies of the regulated company in the first paragraph of the same article 40.1 already included the shareholders general meeting before the modification. It is true that the legislator, being able to do so, has not included an analogous rule to extend to companies’ Boards of shareholders the possibility of taking agreements by voting in writing and without a session that section 2 of the same article 40 allows only for the Direction Bodies.
3. Possibility of understanding held the general meeting as universal.
Nor is it possible to understand, in this case, that the meeting was held as universal. The General Directorate recalls that for a meeting to be universal, the attendance of all the partners is not enough, if this acceptance of the agenda of the same is not expressed unanimously. Therefore, if these requirements are not met, the universal meeting cannot be considered to have been held and the resolutions adopted, as a means to repair the defect of having voted in writing and without a meeting of the meeting.
In the cases in which the agreements can be taken in writing and without a session, with the value of resolutions adopted by the meeting, is allowed by the statutes, there would be no inconvenience in their being taken in this way maintaining the validity of such agreements, even if they had not met the proper requirements established in the law and the bylaws, provided that all the partners unanimously agree to adopt such resolutions in writing and without actually meeting, as well as the unanimous acceptance of the agenda.
In the case under discussion, there was unequivocal opposition from two of the three partners to the adoption of the agreements in this way, which was even included in the notary deed.
4. Conclusions: Impossibility of holding the meeting with a written vote and without an effective session or meeting of the partners.
Therefore, as the General Management has resolved, unless expressly provided in the bylaws, it is not possible for the General Meeting to take corporate resolutions by means of the shareholders’ written vote and without meeting the board. Only when this has been provided for in the statutes, and provided that, as we have indicated at the beginning (i) all the partners express their agreement for the adoption of the agreements without the need for a session; (ii) the matters on which the Board’s agreement is sought are subject to a simply affirmative or negative vote; (iii) communications are made in physical or electronic writing or by any other means of remote communication that duly guarantees the identity of the subject who makes it, as well as the integrity of its content; (iv) and there is a reliable record in the minutes of the procedure followed and the resolutions adopted, stating the identity of the partners, the agreement of all of them with the procedure, the system used to form the will of the Board and the vote cast by each partner.