On 25 June 2020, the Corporate Insolvency and Governance Act 2020 (the Act) received Royal Assent and it now forms part of UK law. Among other provisions, the Act addresses the difficulties faced by UK companies as a result of the COVID-19 pandemic when it comes to holding meetings of shareholders and filing documents with the UK Registrar of Companies (Companies House).
The Act includes the following in relation to company meetings and filings:
The Act includes various provisions to make it easier for UK companies to hold meetings, in light of lockdown and social distancing measures.
The provisions apply to meetings held between 26 March and 30 September 2020 and they can be amended by subsequent Regulations to shorten the 30 September 2020 date or extend it by periods of up to 3 months (but not beyond 5 April 2021) (the Relevant Period).
The Act applies retrospectively, so that proceedings at meetings held after 26 March 2020 may be validated if they would otherwise be in breach of legal requirements and the provisions of the company’s constitution.
The Act provides in relation to meetings of shareholders and classes of shareholders of UK companies, that:
- meetings do not need to be held in a particular place and may be held by electronic means;
- the meeting may be held without any number of those participating in the meeting being together in the same place;
- votes can be cast by electronic or other means; and
- persons attending the meeting have no right to attend the meeting in person, to participate in meetings other than by voting or to use a particular method of voting (such as by show of hands).
These provisions override the requirements of the Companies Act 2006 and a company’s constitution (articles of association).
The Act allows the Secretary of State to make Regulations regarding the form of, and the means and timing of the sending of, notices and other documents relating to meetings. Once again, these Regulations may amend existing laws and override provisions of a company’s constitution.
Annual General Meetings (AGMs)
Where a company was required by law or by its constitution to hold its AGM (and, for a public company, the meeting where it was due to lay its accounts before members) during the Relevant Period, that meeting can be held at any time before the end of the Relevant Period (i.e. before 30 September 2020 (unless that date is changed by subsequent Regulations)).
In considering whether to put back the date of its AGM, a listed company would also need to consider when the share allotment and pre-emption waiver authorities and approvals given at its previous AGM will expire.
Period for filing accounts
Under the Act, UK public companies which were otherwise due to file their accounts in the period after 25 March 2020 and before 30 September 2020 will have until the earlier of 30 September 2020 and the 12 month anniversary of the end of their relevant accounting period to do so. The Companies Act 2006 normally requires the accounts of a public company to be filed within six months of the end of the accounting period.
Pursuant to the Act, The Companies etc. (Filing Requirements) (Temporary Modifications) Regulations 2020 (the Filing Regulations) were introduced on 26 June 2020 and they automatically extend the accounts filing deadline for UK companies by three months (to 12 months for private companies and to nine months for public companies) where the filing deadline falls any time from 27 June 2020 to 5 April 2021 (inclusive). For public companies whose original accounts filing deadline fell on or after 30 June 2020, before it was extended by the Act, the extension available under the Regulations will supersede the extension under the Act. The extensions under the Regulations may not be available for companies that have previously shortened or extended their accounting reference period or which are filing their first accounts.
For public companies with shares admitted to trading on public markets, the time periods allowed by applicable market rules for the publication of accounts should also be considered. For example, as a temporary measure, public companies with shares listed on the London Stock Exchange’s Main Market, which have the UK as their home state, may be given an additional two months to publish their audited annual financial reports (an extension to the four month period normally allowed). A company with its shares listed on AIM can apply (through its nominated adviser and before its current deadline) for an extension of up to 3 months if its financial year ends between 30 September 2019 and 30 June 2020 (an extension to the six month period normally allowed).
The Filing Regulations also automatically extends the time periods for making various filings at Companies House:
|Document||Due to be filed before||Normal deadline||Extended deadline|
|Confirmation statement||6 April 2021||14 days||42 days|
|Event driven filings (including changes to details of directors, secretaries, people with significant control and registered office address)||6 April 2021||14 days||42 days|
|Particulars of mortgages and charges||6 April 2021||21 days||31 days|
We welcome this new piece of legislation from the Government. However, it has been quite a long time coming and clients needed to navigate the very difficult logistics caused by the current crisis for over 3 months before the Act was introduced. As the lockdown is now easing, the “horse has bolted” somewhat, but at least companies will have some certainty about how they now hold meetings and some assurance that meetings they have already held may be effectively ratified in law. The extended filing deadlines will also be helpful as it has been more difficult to arrange the signing of paper forms and documents to make filings at Companies House during the COVID-19 crisis.