‘Virtual Meetings’ are the new ‘Meetings’ – it is time to ensure you have the proper authority to hold a virtual meeting and be bound by the decisions made during the course of them.

By now we have all probably seen the hilarious viral clip of a Handforth Parish Council Meeting conducted by way of a Zoom call, which descends into chaos.

It may have made you wonder, if you are involved in the running of a private company, how you deal with decision-making requirements where restrictions on travel and gatherings pursuant to the ongoing COVID-19 crisis continue; and key people within your business continue to work remotely, as we adapt to new ways of working.

The ‘virtual meeting’ is the new ‘meeting’ so it is time to make sure you are properly authorised to hold them.

Consider your company’s constitution and whether it allows for virtual meetings – check your articles of association. The Model Articles, as long as they have not been amended, do not require directors or shareholders to be physically present in the same room for a meeting to take place. You may proceed in holding a virtual meeting and allow the participants to exercise any rights they may have been granted to speak and vote as you would normally.

This is not necessarily the case for private companies who have amended their articles or where articles pre-date the Model Articles (eg: Table A Companies Act 1985). These companies should carefully review their articles and constitutional arrangements to ascertain whether they allow for virtual meetings.

It is recommended that private companies who do not have the ability to hold virtual meetings should update their articles to mirror the provisions in the Model Articles. As a point of good governance, companies should not rely upon temporary legislation from UK Government (eg: the Corporate Insolvency and Governance Act 2020) to hold virtual meetings nor, where their articles are silent on the subject should they rely upon a court upholding that a virtual meeting and decisions arising from it shall be valid (if they are later challenged) as this is subject to ongoing legal debate and uncertainty.

To achieve certainty, amendments to a company’s articles, allowing virtual meetings will require a special resolution of the shareholders holding not less than 75% of the voting rights. The special resolution takes the form of a statutory written resolution meaning that again, a physical meeting does not have to be held for it to be passed.

Whilst the majority of the above may also apply to public companies and some unincorporated charities, there are subtle differences that apply and specific advice should be taken.

Here at Farleys we can assist and advise you through the process. Contact our experienced corporate team on 0845 287 0939 or contact us by email.