Malta Introduces Regulations for Remote and Virtual AGMs for Public Companies

Malta introduced new regulations, the Companies Act (Public Companies - Annual General Meetings) Regulations, 2020, into Maltese law on 10 July 2020, by virtue of Legal Notice 288 of 2020, (the ‘Regulations’). The Regulations seek to address the issues faced by public companies in holding physical general meetings in a Covid-19 environment.

In terms of scope, it should be noted that the Regulations apply to all public companies but only to the holding of annual general meetings (and in some cases, also extraordinary general meetings). With this in mind, the main points to consider are the following:

1. Extension of period for holding an AGM

Article 128 of the Companies Act, Chapter 386 of the Laws of Malta (the ‘Companies Act’) requires companies to hold an annual general meeting (‘AGM’) every year and requires that no more than 15 months should elapse between one AGM and the next. The Regulations extend this 15-month period by an additional five months.

2. Holding of AGMs and EGMs remotely

The Regulations provide that an AGM or any extraordinary general meeting (‘EGM’) may be held remotely, this notwithstanding anything contained in the Memorandum and Articles of Association (‘M&A’) of a company. In cases where an AGM or EGM is held remotely, the following conditions must be followed:

a) the quorum for those meetings must be that set out in the M&A. However, notwithstanding the provisions of the M&A, the quorum may consist of persons who are present at the meeting by proxy and no physical attendance of shareholders is allowed at the meeting;
b) shareholders may only appoint the Chairman of the meeting as their proxy. They may indicate on the proxy form how the Chairman (qua proxy) is to vote on each resolution put to the meeting;
c) sufficient time must be allowed for shareholders to ask questions related to the items on the agenda of the meeting in advance; and
d) an invitation to ask questions must be contained in the notice convening the AGM or EGM and shareholders must be allowed time to submit such questions in writing up to 48 hours prior to the meeting. The company must then provide an answer to the questions on its website within 48 hours from the termination of the meeting. The company may provide an overall answer to questions having the same content.

3. Holding of AGMs and EGMs virtually

Notwithstanding the above and only if the M&A of the company so provides, the Regulations stipulate that the AGM or any EGM of a public company may be held virtually. The notice calling the meeting of such company must include, with reasonable prominence:

a) the means used for the virtual meeting; and
b) the procedure of how any member:
     i. is entitled to attend and vote;
     ii. can participate in the discussion; and
     iii. can vote.

4. Extension of period for laying and filing annual accounts

The Regulations contemplate extensions of two statutory periods set out in the Companies Act:

a) In terms of Article 182(2)(b) of the Companies Act, the annual accounts of public companies must be laid before the company in general meeting for approval within seven months from the end of the relevant accounting reference period. The Regulations extend this seven-month period for laying of the annual accounts by an additional five months.

b) In terms of Article 183 of the Companies Act, a copy of the company’s annual accounts (and accompanying documents) must be delivered to the Registrar of Companies within 42 days from the end of the period for laying of the annual accounts. This 42-day period shall also start to run from the extended period for laying of the annual accounts as described in point a) above.

A company availing itself of the above extensions must deliver to the Registrar of Companies a notice in the form set out in the Schedule to the Regulations. Non-compliance with this requirement will cause every officer of the company to be liable to a penalty of €500.