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Notary Councils: Guidelines and Interpretations.

In the absence of significant jurisprudential decisions on the aforementioned emergency legislation, we highlight the guidelines expressed by notary councils regarding the topic of remote company meetings.

The Meeting: Convocation, Conduct, and Participation.

The first interpretive doubt concerns the need, for the conduct of remote meetings, for a prior statutory clause allowing participation in the meeting through means of telecommunication.

The traditional and established orientation tended towards an affirmative response, considering a generic formulation of the statutory provision to be sufficient (Commissione Società del Consiglio Notarile di Milano, Maximum No. 187 of March 11, 2020).

However, it now seems prevalent that a more liberal thesis is adopted, according to which, even in the absence of a specific statutory provision, participation in the meeting through means of telecommunication should be considered possible. This is conditioned on the concrete respect of the principles of collegiality and the inclusion of the telecommunication means to be used in the notice of convocation, ensuring the principle of equal treatment of shareholders (Comitato Interregionale dei Consigli Notarili del Triveneto).

As for the identification of the usable means, it is believed that statutory autonomy can be widely exercised as long as the chosen tools allow the chairman to carry out the assessments required by Article 2371 of the Civil Code and the recording party to perceive the events occurred, documenting them in accordance with Article 2375 of the Civil Code, and as long as the principle of equal treatment is respected.

Even before the entry into force of the emergency legislation, questions were raised about the possibility of extending the use of telecommunication means to the chairman and/or the recording party, and in relation to this, whether a so-called virtual meeting, without a physical place of convocation, would be admissible.

The issue was addressed by the Commissione Società del Consiglio Notarile di Milano in the Maximum No. 187 of March 11, 2020 (therefore, preceding and independent from the emergency provisions). This maximum established that if the possibility of participating in the meeting through means of telecommunication is provided, this method of participation can involve all participants in the meeting, including the chairman.

In the place indicated in the notice of convocation, the recording secretary or the notary must be present, as well as the individuals responsible for verifying the presence (if this task is not assigned to the recording secretary or the notary).

This maximum also surpasses the previous notarial orientation that had been formed since the use of telecommunication means in conducting company meetings, even before the reform of company law in 2003. It required, among the conditions for a valid remote meeting, the presence of both the chairman and the recording secretary at the place of convocation.

With the Maximum No. 188 of March 24, 2020, the Consiglio Notarile di Milano, taking into account the legislative intervention, established that in joint-stock companies with shares traded on regulated markets or multilateral trading facilities, as well as in joint-stock companies with widely dispersed shares among the public, if the notice of convocation provides that participation in the meeting is exclusively through the representative designated under Article 135-undecies of the Consolidated Financial Act, the meeting can take place, even exclusively, through means of telecommunication that ensure the identification of participants, their participation, and the exercise of voting rights.

Right to Vote

From another perspective, the Notary Committee of Triveneto stated that “the possibility, provided for limited liability companies by Article 106, paragraph 3, of Legislative Decree of March 17, 2020, No. 18, converted into law, with amendments, by Law No. 27 of April 24, 2020, to allow voting to take place through written consultation or written consent ‘even in derogation from Article 2479, fourth paragraph, of the Civil Code’ should be understood as limited to cases where the articles of association do not provide for a non-assembly method for making decisions by the shareholders.

For all these matters, the provision of Article 106, paragraph 2, which allowed for participation in the assembly through means of telecommunication during the emergency period and the possibility of electronic or postal voting, applied instead. The emergency provisions do not in any way affect the general principles regarding notarial control of substantive legality concerning amendments to the articles of association, as provided for in Articles 2480 and 2436 of the Civil Code.”

End of the Emergency Period

The first issue concerns whether, with the end of the emergency period and the consequent expiration of the Covid-19 emergency regulations for assembly meetings, the participants should resume physical attendance (at least the chairman and the secretary). Alternatively, when notarial intervention is required, whether the chairman of the assembly should visit the notary’s office.

If certain requirements are met, it is believed that there is no need for physical attendance.

The first requirement is that, in the case of properly convened assemblies, the bylaws provide for the possibility that the notice of the meeting indicates that the assembly will take place exclusively through means of telecommunication, without specifying a physical location.

This method was elaborated in the principle No. 200 of the Company Commission of the Notarial Council of Milan.

As suggested by principle No. 200, however, the indication of the meeting location should be interpreted in a more modern way, in line with the evolution of times and legislation, legitimizing, for all intents and purposes, participation in the assembly through telecommunication means (physical or virtual location).

And it is Article 2370, paragraph 4, of the Civil Code itself that allows participation in the assembly through means of telecommunication, making virtual attendance equivalent to physical attendance.

Even in the absence of a statutory clause allowing for the exclusive convening of meetings at a distance, the online meeting mode can be adopted if the assembly is held in a comprehensive manner, with the participation, either in person or by proxy, of 100% of the capital and the required participation of corporate bodies, depending on the case, for both joint-stock companies and limited liability companies.

The second aspect concerns the so-called deferred minutes.

It could be hypothesized that this circumstance would be an insurmountable obstacle to the conduct of entirely remote meetings when the bylaws provide that, in the case of telecommunication participation, the chairman and the secretary must be present in the same location. However, even in this case, there is a consensus to legitimize the holding of the assembly meeting with the virtual participation of all attendees (including the chairman and the secretary).

In such a case, the minutes will be drawn up subsequently, in a non-contemporaneous form (referred to as posthumous or deferred minutes), and can be signed solely by the recording notary.

The physical presence in the same location would, in fact, serve only to expedite the drafting and signing of the minutes by both the chairman and the secretary or the notary but should not be interpreted restrictively.

An additional aspect concerns the board of directors and the board of auditors’ meetings. It is deemed legitimate to include provisions in the bylaws that establish the possibility of convening the board of directors and the board of auditors exclusively through audio/video conferencing. Moreover, for these corporate bodies, an online-only mode would be permissible even in the absence of a specific bylaw clause, as long as the articles of association allow for meetings to be held using means of telecommunication.