Extension of rules that temporarily ease company meeting flexibility

The duration of some of the temporary measures introduced by the Corporate Insolvency and Governance Act 2020 (CIGA 2020) have been extended again so that they now end on 30 March 2021. The government has also temporarily removed (again) the threat of personal liability for wrongful trading from directors until 30 April 2021.

CIGA 2020 which took effect from 26 June 2020 (other than paragraph 51, Schedule 3):

• introduced greater flexibility into the insolvency regime;
• temporarily suspended parts of the insolvency regime to support
  directors in navigating COVID-19 without threat of personal
  liability and to protect companies from aggressive creditor action;
  and
• temporarily eased company filing requirements and requirements
  relating to meetings (including annual general meetings (AGMs)).

On 9 July 2020, ICSA, The Chartered Governance Institute published guidance on shareholder meetings under CIGA 2020. This is an updated version of earlier guidance published in March 2020 on planning AGMs in the light of the COVID-19 pandemic.

This insight looks at the new measures for meetings and company filing requirements as extended.

Our view

The new measures for meetings are very helpful, and the extension will allow more companies to take advantage of being able to hold virtual meetings.

Meeting and filing measures

These measures are to deal with the fact that physical meetings are not currently practicable because of social distancing measures and difficulties experienced in compiling information for filings that must be made at Companies House and making those filings. CIGA 2020, as extended, includes:

• greater flexibility about the manner in which meetings are held for
  example, companies can hold meetings, and allow votes to be cast,
  by electronic means.

• an extension to the period within which companies must hold an AGM –
  companies with a deadline for holding an AGM expiring between 26
  March 2020 and 30 March 2021 (extended from 30 December 2020) have until 30 March 2021 to hold their AGM.

• these measures apply for a temporary period from 26 March 2020
  until 30 March 2021 (extended from 30 December 2020) (relevant period).

  There is a power to extend that period by up to three months at a time, but the temporary period cannot be extended beyond 5 April 2021.

• giving the Secretary of State a power to make regulations to extend
  deadlines for certain filings, including: accounts ( Part 15 of the
  Companies Act 2006); annual confirmation statements (Part 24 of that
  Act); notices of certain relevant events under that Act; and
  registration of charges ( Part 25 of that Act).

Meeting flexibility

Where a company (and other specified bodies) holds a general meeting (or class meeting) during the relevant period, the provisions of any enactment and in its constitution relating to general meetings (or class meeting) takes effect subject to the following:

• Those meetings:

  • do not have to be held at any particular place;
  • can be held, and any votes can be cast, by electronic means or any
    other means; and
  • can be held without any number of those participating in the
    meeting being together at the same place.

• A member does not have a right to:

  • attend the meeting in person;
  • participate in the meeting other than by voting; or
  • vote by particular means.

Members do, however, continue to have a right to vote by some means.

The Secretary of State can make regulations about the means by which, the form in which, and the period within which, any notice or other document relating to such a meeting applies or is expected to apply, may be given or made available.

Extension of period to file public company accounts

Where a public company must file its accounts and reports after 25 March 2020 and before 30 September 2020, that period is temporarily extended to end (and as if that had always been the case) on the earlier of (i) 30 September 2020 and (ii) the last day of the 12 months immediately following the end of the relevant accounting reference period.

For example, if a public company’s accounting reference period ends on 1 December 2019, so that the company would normally have to file its accounts on or before 1 June 2020, the deadline is extended to 30 September 2020.

Further extensions have now been granted – see Extension of filing periods below. In light of the changes introduced by the Act, the Government has published Guidance for public limited companies and SEs with an accounts filing deadline between 26 March 2020 and 29 September 2020.

Extension of filing periods

The Secretary of State can make regulations to extend the period during which certain returns or filings must be lodged with Companies House. The extended filing period cannot exceed:

• 42 days, where the existing filing period is 21 days or less; and
• 12 months, where the existing filing period is between three, six and
  nine months.

These powers will expire on 5 April 2021 but don't affect the continued operation of any regulations already made.

On 27 June 2020, the Companies etc (Filing Requirements) (Temporary Modifications) Regulations 2020 came into force.

These Regulations temporarily extend various filing deadlines for companies and other entities registered at Companies House. The extension applies to a filing deadline that falls between 27 June 2020 and 5 April 2021. Provided that the filing deadline falls on or before 5 April 2021, then it will still be extended in accordance with the Regulations, even though the Regulation itself expires at the end of the day on 5 April 2021.

Examples of the deadlines which are extended for companies are:

• the accounts filing deadline is extended by 3 months, to 12 months for private companies and 9 months for public companies;
• the 14 day deadline for the annual confirmation statement after the end of the company’s year-long confirmation period is extended to 42 days;
• the 14 day deadlines for submitting notices of relevant events after they occur are extended to 42 days (e.g. change of director, PSC or registered office);
• the 21 day deadline for registering a charge against a company’s assets is extended by 10 days to 31 days.

These temporary filing extensions also apply to limited liability partnerships, unregistered companies and European Economic Interest Groupings.

The Government has also updated its Guidance for companies on applying for more time to file their accounts.