The Finnish Companies Act was amended as of July 2022 to allow private limited liability companies as well as listed companies to hold general meetings as fully-remote virtual meetings without any physical venue or so-called hybrid meetings. In addition, the new legislation clarifies ways for companies to offer additional participation opportunities to so-called traditional general meetings as well as the new remote and hybrid meetings.
In accordance with the new legislation, the precondition for arranging a remote meeting is that the company’s Articles of Association include a provision thereof. In practice, the Articles of Association should be amended so, that it includes a provision that allows (or requires) a remote general meeting to be held. A change to the Articles of Association to permit remote meetings requires the approval of a qualified majority of a general meeting (2/3 of shares and votes at the meeting).
The purpose of the new legislation is also to clarify and promote the arranging of hybrid meetings. A hybrid meeting is a general meeting that allows for participation at the physical venue of the general meeting as well as participation via a remote connection. The Board of Directors is authorized to decide that a general meeting will be held as a hybrid meeting, unless the Articles of Association specifically limit or prohibit this. The changes made to the Companies Act allow an amendment of the Articles of Association that imposes a requirement on the company to hold general meetings in the hybrid format to be passed with a simple majority of votes cast.
From the technical point of view, the online connection and service used in the remote or hybrid meetings should provide all shareholders with equal chances to participate in the general meeting. Remote participants must be able to exercise their full shareholders’ rights similarly as in a traditional meeting i.e. they must have the right to take part and speak (right to request information, make comments and suggestions), right to vote and all other rights pertaining to the shareholders in a general meeting under the Companies Act and Articles of Association.
Especially companies that hold hybrid meetings should note that once a person has registered as a remote participant, they cannot change their minds and participate physically if the notice to the general meeting so stipulates and the full shareholders’ rights are guaranteed through an online connection. This enhances the companies’ ability to book venues and make other arrangements for the general meeting.
The abovementioned changes to the Companies Act provide companies with a significant amount of freedom in terms of how to arrange their general meetings and enable the general meetings to be held in a way that, for example, takes into account the shareholder roster and facilitates the possibilities to participate in the meeting. More emphasis will be placed on the technical solutions of the third parties providing the different meeting services and systems as well as the reliability and ease of use of those solutions. The new legislation has provided tools to mitigate the risks caused by these technical solutions, such as the chairperson’s right to suspense and later continue the general meeting due to a malfunction in the company’s online connection or technical tool. Moreover, considering the fast pace in the development of the meeting services and the meeting practices formed by experience, remote and hybrid meetings are likely to increase significantly.
Kalliolaw’s corporate lawyers help our clients to amend their Articles of Association to allow general meetings to be held remotely. We also assist you with the general meeting arrangements.
For more information, please contact:
Managing Partner Olli Oksman
puh. +358 50 591 6315
Associate Taina Metso
puh. +358 50 591 1087