How do you hold a meeting in a lockdown?

Justin Cumberlege, a partner in the healthcare law firm Hempsons, considers whether you are able to hold statutory meetings in a lockdown

Published in Practice Management April 2020

The current COVID-19 pandemic has meant we have all had to face new challenges and ways of working virtually we never thought we would encounter. Some GP federations have been well placed to support member practices, but have found that their corporate governance structure is poorly suited to dealing with a crisis.

Taking decisions has always been dependent on meetings, and some companies have requirements that notice periods of 14 or 21 days are given. While the Companies Act requires a minimum of 14 days’ notice for meetings of members, some had the same for Board meetings as well, meaning quick decisions would not be possible.1

What solutions are there?

For Board meetings, if all the directors agree to the meeting at short notice, even if they cannot attend, and the meeting is quorate, then the decisions will be valid. The same applies for meetings of members, as long as 90% of the members agree to the short notice.2

What happens when meetings are banned?

Many articles of association (the company’s constitution) state that a percentage of the members have to be present for the meeting to be quorate. Some state that proxies are included in the quorum, so, provided that someone has been appointed the proxy for sufficient members, then the meeting is quorate. Case law suggests two people have to be present for there to be a meeting.

Can you hold a virtual meeting?

Unless the Company’s constitution states that physical attendance is required, legally, a company may hold a virtual meeting, and some companies’ constitutions provide for this specifically.

It is important that the members have consented to the meeting to be held electronically. This could be deemed if the provisions are in the articles, but otherwise express consent should be obtained and the members’ preferences as to how to be contacted and how to participate taken into account.

The company may need a way of verifying members, such as using a code to log in. It must be possible to conduct a poll if demanded, which, if you have not installed a voting software, could be an issue.

An alternative to the virtual meeting is passing resolutions in writing. Again, unless the company’s constitution states otherwise, the Companies Act3 gives every company the right to pass resolutions through members signing them.

There must be at least 28 days for the members to respond. The rules regarding quorums do not apply, so to pass a written resolution the required majority is of all the members, not just those who voted. Therefore, not until over 50% of the members have voted for an ordinary resolution, or 75% for a special resolution, would it be passed.

Reviewing your federation’s constitution from time to time is important to ensure it can cope with changing circumstances.

[1] Section 307 Companies Act 2006

[2] Ibid sub-section (6)

[3] Ibid section 288