COVID-19 new rules with relevance in the corporate area

Juan Escudero Herreros – jeh@eja.es

New rules approved by Spanish RDL 8/2020 of March, 17th, of urgent and extraordinary measures to face the social and financial impact of Covid-19 with relevance in the functioning of the corporate and administration organs of the commercial companies:

Meetings and adoption of resolutions by the corporate bodies:

  1. The general shareholder meetings and the board meetings of commercial companies can be held via video-conference while the state of alarm lasts, even if this not expressly contemplated in the articles of association.
  2. Resolutions of both corporate organs can be adopted in writing and without a session, even if the articles of association do not contemplate expressly this possibility, and by all means if this is demanded by at least two members of the board.
  3. In all these cases the meeting will be deemed to have been held in the registered office.

Annual accounts:

  1. Covid-19 new rules with relevance in the corporate areaThe period of formulation of the accounts by the directors (e.g. the board) will be suspended while the state of alarm lasts and, when it finalizes, the period of preparation will resume for another 3 months.
  2. If the annual accounts have already been formulated by the directors (e.g. board) the period to submit the accounts to statutory audit (if the company is subject to compulsory auditing) that period will be extended for another 2 months from the finalization of the state of alarm period.
  3. The annual general shareholders meeting will be held within 3 months from the finalization of the period of formulation in accordance with the foregoing rules.
  4. If a shareholders meeting has already been called but it has not been held, it can be cancelled or moved back by means of separate announcement published at least 48 hours before the meeting in the company’s corporate website or in the absence thereof in the Spanish Official Gazette.
  5. If the meeting is called off, the shareholders meeting must be called again within one month from finalization of the state of alarm period.
  6. If the presence of a notary has been required to be present in the general shareholders meeting to draw up the minutes, he can attend the meeting by real time remote communication means that “adequately guarantee the performance of the notarial function”.
  7. If during the state of alarm period there concurs a legal or agreed cause of necessary dissolution:
    • The legal deadline to call the general shareholder meeting to decide the dissolution of the company or the suppression of the legal causes will be suspended until the end of the state of alarm period; and
    • Directors (e.g. the board) will not be held answerable for the debts contracted during such period.
  8. Other rules are specifically applicable to listed companies.

At your service for any queries.
Best Regards,

Juan Escudero Herreros – jeh@eja.es