Current situation
Under current legislation, a fully digital general meeting is not possible. The law requires that the general meeting be held in the place specified in the articles of association, or in the municipality where the company has its registered office. This implies that there must be a physical place where persons entitled to attend meetings can physically participate in the meeting.
However, it is already possible to provide in the articles of association that persons entitled to attend the general meeting can speak and exercise voting rights by electronic means of communication (e.g. a conference call or video call). This is a hybrid general meeting, where it is possible both to appear at the physical meeting place and to participate remotely.
The Act
The Act allows for fully digital general meetings, except for the annual general meeting of a listed company (the meeting at which the annual accounts are adopted). It also sets new conditions for the use of electronic means of communication and amends the rules for convening a (partly or fully) digital meeting.
The fully digital general meeting
The Act provides for an extra possibility (in addition to the physical and hybrid meeting) for holding a general meeting: the fully digital meeting. According to the explanatory memorandum, to hold a fully digital meeting, there must be support from the majority of those entitled to vote. These meetings are therefore only possible if the articles of association provide for them. By amendment, an exception has been made for the annual general meeting of a listed company: if the articles of association so provide, this meeting may be attended digitally (hybrid), but it must always remain physically accessible. For extraordinary general meetings, the circumstances under which the meeting will be held exclusively digitally must be determined in or pursuant to the articles of association. If these circumstances do not follow from the articles but, for example, from regulations, they must be stated in the notice convening the meeting.
Conditions for the fully digital meeting
According to the explanatory memorandum, the fully digital general meeting must be a fully viable alternative to a physical meeting. Persons entitled to attend must have the opportunity to ask questions at a fully digital general meeting, and the board is required to answer these to the best of its knowledge. To ensure this, meeting attendees must be able to participate in the meeting with sound and vision. The use of a two-way audiovisual means of communication, such as video calling, will be mandatory. A simple telephone connection or conference call, as permitted under current legislation, will no longer suffice. In addition, the Act requires that those entitled to attend meetings be able to participate in the deliberations. Merely being able to take note of the deliberations through a live stream, as permitted under current legislation, will no be longer sufficient. Further conditions may still be included in the articles of association.
As is the case under current legislation, those entitled to attend meetings must still be identifiable and able to exercise their voting rights via the electronic means of communication. The Act prescribes no further rules as to how this must take place. For legal entities with relatively few persons entitled to attend, video calling, with voting by a show of hands (or, we believe, by email to the chair of the meeting) will probably be appropriate. For listed companies, a digital environment is envisaged, facilitated by one or more banks or other intermediaries, enabling participants to vote live with a ‘mouse click’.
Convocation
Under current legislation, persons entitled to attend meetings may only be called to a general meeting by a digital message, such as an email, if they have consented to this. Otherwise, the notice must be sent by post. This consent requirement will be removed, so that persons entitled to attend meetings may always be called ‘digitally’ unless the articles of association provide otherwise.
In addition, it is no longer necessary for non-listed NVs and listed NVs that have not yet been exempted (such as those listed on the NYSE, Nasdaq and LSE) to give notice convening the meeting via a national newspaper. A digital notice or digital announcement – for example, on a website – that is directly and permanently accessible until the general meeting will suffice. This is in line with the current rules for listed NVs.
The Act requires the notice convening a (partly or fully) digital meeting to include information about the procedure for digital participation in the meeting and the exercise of voting rights. This is already mandatory under current law for listed NVs and will apply to all legal entities. The notice must state, for instance, which meeting application is being used, and must specify the link through which it is possible to participate.
Emergency circumstances
Under the Temporary COVID-19 Justice and Security Act (Tijdelijke wet COVID 19 Justitie en Veiligheid), it is possible to hold digital meetings in certain emergency circumstances without a basis in the articles of association. While practitioners are expected to embrace digital conferencing and to adjust articles of association accordingly when the occasion arises, the ability to hold digital meetings will not always be provided for in the future either. The Minister intended to consider whether a further (emergency) regime for digital meetings was necessary in connection with a broader revision of emergency constitutional law. Pending that review, an amendment was adopted under which the Act now provides for an emergency regime. Even without a basis in the articles of association, the board may determine that a general meeting will be held exclusively digitally if an exceptional circumstance arises that seriously endangers the continuity of decision-making or the safety and health of those entitled to attend the meeting. According to the explanatory notes, an ‘exceptional circumstance’ is understood to mean only a circumstance such as a pandemic, natural disaster, war, terrorist threat or another unforeseen calamity. If this option is used, it must be announced in the notice convening the meeting.
Transitory law
To ease the transition from the current to the new legislation, the Act provides for transitory law. For example, for one year after the Act enters into force, meetings may still be held under the current rules, for example by conference call instead of audiovisual means. In addition, provisions in the articles of association that allow digital participation in a meeting under the current law will be read as referring to the new law once the Act enters into force. In other words, if the current articles of association facilitate a hybrid meeting, they will be deemed to facilitate a fully digital meeting once the Act enters into force.
Conclusion
If you wish to take advantage of the upcoming option of fully digital meetings, you can make anticipatory amendments to the articles of association. Including a ‘transitory provision’ will enable you to ensure that fully digital meetings become possible as soon as the Act enters into force.
The Act’s intended date of entry into force is still unknown, but the fixed dates for changes (1 January and 1 July of each calendar year) will be taken into account as far as possible. Considering the moment the Act was adopted by the House of Representatives, entry into force on 1 July 2026 seems most likely.
If you have any questions or wish to receive more information, please contact Paul de Vries or Thomas de Rave.