In relation to the Covid-19 crisis and by way of the publication of Royal Decree-Law 11/2020 of 31 March (“RDL 11”), the government has wanted to specify, clarify and expand, inter alia, those provisions established in Royal Decree-Law 8/2020 of 17 March (“RDL 8”) which affect the day-to-day business of legal persons under private law, principally in terms of the holding of the shareholders’ and management bodies’ meetings, as well as the preparation, audit and approval of the annual accounts:
Holding meetings of the management bodies and shareholders’ meetings
- As we already stated in a previous article, in the reference given by RDL 8 to the governing bodies, both the management bodies (órganos de administración) and the shareholders’ meetings (juntas de socios) should be included. RDL 11 partially clarifies this interpretation problem as it adds a second paragraph to Article 40.1, in which it makes express reference to the fact that meetings or assemblies may be held by video and, it adds with respect to RDL 8, “by telephone conference.” Nevertheless, it does not make this same distinction or clarification with respect to the possibility of adopting resolutions by written vote and without a meeting. For this reason we must understand, without agreeing, that said possibility only applies to the managing body.
Preparation, verification and approval of the annual accounts
- In this respect it should be noted that, in a normal situation, the management body must prepare the annual accounts corresponding to the previous financial year within three months to be counted from the end of such financial year. Subsequently, the auditors will present their report, where they have at least one month from the time the accounts signed by the directors were given to them. The general shareholders’ meeting must approve the annual accounts within six months following the end of the previous financial year. At that time the company will have one month to present the annual accounts at the Mercantile Registry for their deposit.
RDL 11 adds that the auditors will have a term of two months in which to proceed with the audit of the annual accounts to be counted from the date on which the state of alarm ends if the annual accounts were prepared before or during the state of alarm.
In addition, there is an Article 6.Bis which establishes that if the ordinary general shareholders’ meeting is called during the state of alarm and has prepared the annual accounts, the directors may substitute the proposal for application of the profit/loss for another application. To do this, they must justify said modification based on the situation caused by COVID-19. If the accounts are audited, the auditor must indicate in a separate note that the new proposal from the managing body does not cause or would not have caused any change in its audit report. Likewise, and if the meeting was already called, the point relative to the proposal for the application of the profit/loss may removed from the agenda, where a new meeting must be held ad hoc for such purpose. Said meeting must be held within three months from the preparation of the annual accounts, where there are, let us recall, three months from the end of the state of alarm to do so.
More information: Christian Krause ([email protected]) y Andrés Monereo ([email protected])
T (+34) 91 319 96 86