French State of health emergency and easing of the rules for meetings and deliberations of the governing bodies and the general meetings

Key points: 

The French Law of March 23, 2020 (Loi n° 2020-290 d'urgence pour faire face à l'épidémie de covid-19) introduced a state of health emergency in France.

To allow and facilitate remote participation for companies, the French government has subsequently adopted an Order (Ordonnance N° 2020-321) on March 25th allowing a easing of the rules for meetings and deliberations of the governing bodies and the general meetings.

Legal entities (such as civil and commercial companies, masses of holders of securities or financial securities, EIGs, associations, etc.) as well as entities without legal personality under private law, may benefit from these provisions until 31 July 2020 (unless this deadline is extended to a date set by decree and no later than 30 November 2020) and retroactively for their governing bodies meetings and general meetings held as of 12 March 2020. 

Regulatory provisions are expected to specify those of the Order which will necessarily raise questions.

To go into more detail:

1. Regarding general meetings 

• Convening meetings for listed companies

Where a listed company is required to convene a shareholders' meeting by post, the meeting is no longer null and void simply because it was not possible to convene it by post due to circumstances beyond the company's control. 

• Information prior to the meetings 

Where a member of a meeting, prior to the holding of the meeting, has the right to obtain communication of a document or information, such communication may now validly be made by electronic message, provided that the member indicates in his request the electronic address to which it may be made.

• Attendance at meetings 

By way of derogation from law (in particular for French « SA » and « SARL » companies), when an assembly has been convened in a place affected by an administrative measure limiting or prohibiting collective gatherings, the body competent to convene may exceptionally decide that it will be held without the physical presence of its members, and in particular by means of a telephone or audiovisual conference.

The members of the meeting must be notified by any means that will ensure that they are effectively informed about the holding of the meeting. Other persons entitled to attend meetings may attend by the same means. These provisions shall apply regardless of the subject matter of the decision on which the meeting is called to vote.

It should be noted that the French financial markets authority (AMF) published a press release on March 6 reminding shareholders of listed companies that they may vote without being physically present, notably by mail using a voting form or a voting proxy, or on the Internet via a secure voting platform if the issuer's articles of association so permit.

• Proceedings of the shareholders' meetings

For the purpose of calculating the quorum and majority, the competent body may also decide that members of the meetings who participate by means of a telephone or audiovisual conference allowing them to be identified shall be deemed to be present. The decisions of the meetings may be taken by written consultation of their members when this alternative means of participation is already provided for by law without a clause in the articles of association being necessary or being able to oppose it and whatever the purpose of the decision.

• In the event of notices of meetings already issued

When the competent body or its delegate decides to apply the provisions mentioned above, and when all or part of the formalities for convening the meeting have been completed prior to the date of this decision, the members of the meeting shall be informed, by any means that ensures that they are effectively informed, at least three working days before the date of the meeting, without prejudice to the formalities that remain to be completed on the date of this decision. In this case, a change in the place of the meeting or in the means of participation shall not give rise to a renewal of the formalities for convening the meeting and shall not constitute an irregularity in the convening of the meeting.

2. Regarding collegial administrative, supervisory and management bodies meetings

• Attendance at meetings 

The French Commercial Code requires « SA » companies to have at least half of the members of the Board of Directors (or of the Supervisory Board) physically present for the annual financial statements meeting.

By way of exception, members are now deemed to be present at meetings of the governing bodies if they take part in a telephone or audiovisual conference allowing them to be identified and guaranteeing their effective participation.

The provisions of the Ordinance are applicable to collegial administrative, supervisory and management bodies without any clause in the Articles of Association or internal regulations being necessary for this purpose, nor being able to oppose them.

• Decisions taken at meetings 

Decisions may be taken by written consultation of their members under conditions ensuring collegial deliberation without any clause in the statutes or rules of procedure being necessary for this purpose, nor being able to oppose it, and whatever the subject of the decision on which the body is called upon to take a decision.

To be read in conjunction with:

• Order of 25 March 2020 (Ordonnance n° 2020-318) easing the rules for the presentation and the approval of the corporate financial statements;
• Act of 23 March 2020 (LOI n° 2020-290) introducing a state of health emergency as a response to the covid epidemic-19