Two pieces of legislation have recently come into force that amend the Corporate Insolvency and Governance Act 2020, these are the:
- Corporate Insolvency and Governance Act 2020 (Coronavirus) (Extension of the Relevant Period) Regulations 2020, and;
- Corporate Insolvency and Governance Act 2020 (Meetings of Scottish Charitable Incorporated Organisations) (Coronavirus) Regulations 2020.
These came into force on 29 September 2020 and 30 September 2020 respectively. The Regulations extend the period for companies, SCIOs and other corporate bodies specified by the Act to hold their AGMs until 30 December 2020 (this had previously been extended to 30 September under the Corporate Insolvency and Governance Act 2020).
So what does this mean, in practical terms?
Where possible, hold meetings virtually
The statutory provisions of the 2020 Act provide a high degree of flexibility for holding meetings without members all being physically present in the same place.
Meetings do not need to be held at a particular place, can be held by electronic means and voting can also be done by electronic means. Any members’ rights that may have conflicted with these provisions are effectively suspended and the provisions take precedence over a company’s articles of association or a SCIO’s constitution.
These measures have been extended from 30 September 2020 until 30 December 2020. This means that in the coming months charitable companies, SCIOs, etc. can continue to take advantage of the flexibility and can conduct meetings virtually.
We would encourage the use of virtual meetings to enable continued management of companies and SCIOs where this is appropriate.
Postponing your AGM
In normal circumstances SCIOs are under a statutory obligation to hold a members’ meeting every 15 months. Although a SCIO’s constitution can go even further and may require a meeting more regularly, e.g. one per calendar year. Measures suspending the obligation to hold a members’ meeting have been extended from 30 September 2020 until 30 December 2020.
This means that any members’ meetings that needed to take place before 30 December 2020 have been granted an extension and can now take place at any point up until 30 December 2020.
While companies have no similar statutory obligation to hold an AGM, provisions for holding one are commonly included in articles of association. As with SCIOs, the regulations supersede a company’s articles of association and suspend the requirement to have an AGM (i.e. this can now take place up until 30 December 2020).
Updating your Constitution
Now is a good time to think about updating your company’s articles or your SCIO’s constitution and future-proofing it.
Consideration should be given to amending these constitutional documents, to include wording to allow for virtual meetings – this is something which we are currently assisting a number of third sector organisations with and would be happy to discuss with you.
James Doherty
Senior Solicitor
Banking & Finance
James is a Senior Solicitor at Burness Paull.
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