Amendments to the Commercial Code that took effect on 15 November 2009 brought new facilities for conducting shareholders’ meetings.
First and foremost, the amendments are designed to protect the interests and rights of those shareholders who cannot participate in the meeting, ensuring better information supply regarding issues to be put to a vote at the meeting and enabling them to participate in the vote even when unable to participate in person or through a representative.
Unlike the previous regulation, the articles of association of a public limited company (AS) or a private limited company (OÜ) may now stipulate an option of voting by post in addition to conventional voting at the meeting. This means that those shareholders who are unable to participate in the meeting can and may forward their votes regarding issues to be put to a vote at the meeting ahead of the meeting in writing by using a specific form. Voting forms must be sent to shareholders together with the invitation calling the meeting or made available on the web-page of the company. The articles of association may stipulate more specific requirements to the forms.
The articles of association may also make provision for electronic voting, if a public limited company or a private limited company is able to organise any such event in a reliable and technically secure manner. In case of electronic voting, votes must be forwarded by electronic means enabling permanent reproduction, while the declaration of intent must include the voter’s name and be signed electronically by the voter. Currently, the law recognises digital signatures as the only means of electronic signature but possibly in the future other means of electronic signature may be recognised by law, i.e. signatures based on fingerprints or the retina. Electronic voting may take place ahead of the meeting or during the meeting.
In order to enable voting by post or by electronic means, both or either cases must be stipulated in the articles of association, which must be amended accordingly. Without such amendments, these voting options cannot be offered to any shareholders.
In order to ensure adequate supply of information sent to shareholders for participating in the voting, the rules for calling a meeting have also been amended. According to amendments to the Commercial Code, the party calling a meeting must send a draft of each item on the meeting agenda. This must be made available simultaneously with calling the meeting, either at the company’s location or on its web-page. The obligation to send drafts extends to all public or private limited companies regardless of whether their articles of association prescribe options for voting by post or electronic means. In the case of private limited companies, the obligation to send drafts may be eliminated in the articles of association but no such option exists in the case of public limited companies, which must prepare and send drafts in any event.
This article was written by senior associate Heili Haabu. Heili advises clients mainly on corporate and employment law matters. She also provides legal counsel in correspondence with state authorities and represents clients in employment law disputes.
Please read more about our Corporate and Employment practice here.
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New Voting Facilities and Obligations for Shareholders’ Meetings
Amendments to the Commercial Code that took effect on 15 November 2009 brought new facilities for conducting shareholders’ meetings.
First and foremost, the amendments are designed to protect the interests and rights of those shareholders who cannot participate in the meeting, ensuring better information supply regarding issues to be put to a vote at the meeting and enabling them to participate in the vote even when unable to participate in person or through a representative.
Unlike the previous regulation, the articles of association of a public limited company (AS) or a private limited company (OÜ) may now stipulate an option of voting by post in addition to conventional voting at the meeting. This means that those shareholders who are unable to participate in the meeting can and may forward their votes regarding issues to be put to a vote at the meeting ahead of the meeting in writing by using a specific form. Voting forms must be sent to shareholders together with the invitation calling the meeting or made available on the web-page of the company. The articles of association may stipulate more specific requirements to the forms.
The articles of association may also make provision for electronic voting, if a public limited company or a private limited company is able to organise any such event in a reliable and technically secure manner. In case of electronic voting, votes must be forwarded by electronic means enabling permanent reproduction, while the declaration of intent must include the voter’s name and be signed electronically by the voter. Currently, the law recognises digital signatures as the only means of electronic signature but possibly in the future other means of electronic signature may be recognised by law, i.e. signatures based on fingerprints or the retina. Electronic voting may take place ahead of the meeting or during the meeting.
In order to enable voting by post or by electronic means, both or either cases must be stipulated in the articles of association, which must be amended accordingly. Without such amendments, these voting options cannot be offered to any shareholders.
In order to ensure adequate supply of information sent to shareholders for participating in the voting, the rules for calling a meeting have also been amended. According to amendments to the Commercial Code, the party calling a meeting must send a draft of each item on the meeting agenda. This must be made available simultaneously with calling the meeting, either at the company’s location or on its web-page. The obligation to send drafts extends to all public or private limited companies regardless of whether their articles of association prescribe options for voting by post or electronic means. In the case of private limited companies, the obligation to send drafts may be eliminated in the articles of association but no such option exists in the case of public limited companies, which must prepare and send drafts in any event.
This article was written by senior associate Heili Haabu. Heili advises clients mainly on corporate and employment law matters. She also provides legal counsel in correspondence with state authorities and represents clients in employment law disputes.
Please read more about our Corporate and Employment practice here.