Kelly Fraser: Coronavirus, social landlords and General Meetings – proposed legislation for companies, registered societies and SCIOs
Harper Macleod’s senior associate Kelly Fraser highlights some of the key proposed provisions in the Corporate Insolvency and Governance Bill ahead of its next reading in June.
The Corporate Insolvency and Governance Bill was introduced on 20 May 2020 and is currently making its way through Parliament. It contains specific provisions regarding general meetings, which will be of interest to social landlords. While the next reading of the Bill is not until 3 June 2020, we have highlighted some of the key proposed provisions below.
The proposed provisions within the Bill apply to the “relevant period” which is defined as 26 March 2020 until 30 September 2020.
Virtual general meetings
Under the Bill, general meetings do not need to be held at any particular place and may be held where votes can be cast by electronic or any other means. Further, general meetings may be held where members participating are not in the same place. These proposed provisions will apply regardless of what is set out in the constitution of a social landlord.
Accordingly, social landlords that need to convene general meetings during the “relevant period” may convene such meetings electronically – i.e. by way of video conferencing – even where the social landlord’s constitution does not permit this.
The Bill also proposes to provide that members may not attend the meeting in person, participate other than by voting or vote by particular means and it will be interesting to see how these specific provisions are debated and enacted by Parliament.
Extension of period to hold annual general meetings
As well as virtual general meetings, the Bill also proposes to extend the period for holding annual general meetings where these are due to be held during the “relevant period”. The Bill provides that regulations may be made in order to extend the period of time for holding an annual general meeting. Most social landlords will be required to convene an annual general meeting within six months of the end of their financial year, which will fall within the “relevant period” where the financial year ended in April.
The maximum period that may be specified in such regulations is eight months and so we will need to see what is introduced under separate regulations being definitively confirming what the extension will be.
Further, there are separate announcements regarding regulatory filing deadlines in relation to accounts, including the deadlines for Companies House, the Financial Conduct Authority and the Scottish Housing Regulator. That being said, social landlords should check their constitutions to confirm if members must “approve” the accounts or if the accounts are simply “presented” at the annual general meeting.
Who does the Bill apply to?
The Bill applies to a “qualifying body”, including but not limited to:
- a registered society under the Co-operative and Community Benefit Societies Act 2014;
- a company under the Companies Act 2006; and
- a Scottish charitable incorporated organisation (SCIO) under the Charities and Trustee Investment (Scotland) Act 2005.
What about governing body meetings?
The Bill does not propose to make any amendments regarding governing body meetings. Accordingly, the provisions of social landlords’ constitutions will still apply. If a social landlord’s constitution does not make provision for governing body meetings to be held virtually then the Bill will not make any amendments to this and amendments to the constitution will need to be made in order to hold governing body meetings virtually.
That being said, the most up-to-date SFHA model rules does include a provision for governing body meetings to be held virtually, although this is not the same as governing body members agreeing a decision by email.
The proposed amendments under the Bill will no doubt be welcomed by social landlords who will need to hold their annual general meeting within the next few months. Further, we are aware that a number of social landlords may seek to hold special general meetings in the near future and so the proposed provisions of the Bill will allow these to be held virtually when they come into force.
However, we will need to wait and see what the final text of the Bill is when it is enacted and also wait for relevant regulations to be introduced by Parliament. Accordingly, social landlords will need to sit tight for the moment and wait for the changes to come into force. We will provide a further update once the Bill has been passed.
- Read all of our articles relating to COVID-19 here.