The new law modifies the previous version of the Public Limited Firms Act by explicitly permitting board of directors (BOD) and shareholder meetings to be held online, as well as changing corporate approval processes for Public Limited Companies.
The new act went into force the day after it was published, but full implementation of some revisions will not be possible until several associated subrules and subregulations are issued. The essential components of the new statute are outlined below.
Company Notices and Advertisements are Disseminated Electronically
Previously, mandatory company notifications, statements, and advertising had to be published in a local newspaper where the firm is situated for at least three consecutive days under the Public Limited Companies Act.
The modified statute, however, enables such notices, statements, and advertising to be distributed electronically, however the procedure must adhere to subregulations published by the Department of Business Development (DBD).
Document Electronic Delivery Options
The modified statute permits public limited company notifications or documents to be issued electronically rather than by registered mail to company directors, shareholders, or creditors, as long as the recipients have chosen to receive such materials online. Documents must be sent electronically in accordance with DBD subregulations.
Individuals with Additional Authority to Call BOD Meetings
The new statute, like the previous version, gives the chairman of the BOD the right to summon a board meeting and permits any two directors to jointly propose that the chairperson hold a meeting, in which case the chairperson must call the meeting within 14 days. The new statute further states that if the chairman does not convene the meeting after 14 days of receiving the request, the seeking directors may directly summon a BOD meeting within the next 14 days.
The new statute also empowers the vice-chairman to convene a BOD meeting if there is no chairperson; if there is no vice-chairperson, this ability goes to any two directors.
Electronic Board of Directors Meetings
The modified Public Limited Companies Act permits BOD meetings to be convened electronically, unless the company’s articles of organization forbid it. Such meetings, which are regarded to be held at the company’s headquarters, must adhere to the legislation governing electronic meetings.
A public limited corporation’s Board of Directors must meet at least once every three months. The previous version of the Public Limited Companies Statute required that a meeting notice be provided to the directors in person or sent to them at least seven days in advance, but the new act shortens the notice time to three days. In the event of an emergency or to safeguard the company’s rights and advantages, the notice time might be reduced further and the notification provided electronically.
Meetings of Electronic Shareholders
Shareholders’ meetings, like electronic BOD meetings, can be held electronically if not prohibited by the company’s articles of incorporation and in accordance with the regulations permitting electronic meetings. Similarly, the meeting is held at the company’s headquarters.
If a shareholders’ meeting is sought by holders of at least 10% of the total issued shares and the BOD fails to convene the meeting within 45 days after receiving the request, the seeking shareholders may call a meeting within the next 45 days. The requested shareholders’ meeting notification can be delivered online if the shareholders have agreed to receive the materials electronically. This document distribution must be in accordance with DBD sub regulations.