TEMPORARY CORPORATE LAW MEASURES INTRODUCED DUE TO THE EPIDEMIC

On 10 April 2020, the Government issued Decree No. 102/2020. (IV. 10) and introduced new temporary corporate law measures with the aim of facilitating the decision-making process of the companies in compliance with the restrictions on movement introduced due to the spread of the epidemic.

Pursuant to the new rules, all meetings of the decision-making bodies (e.g. members’ meeting or general meeting) and of other bodies of the company (e.g. board of directors, supervisory board) should not be held in a way which would require the personal presence of the members. If the members’ meeting might be held in compliance with the stay-at-home order, the new provisions are not applicable. This might be the case when the members of the company live in the same household. The decision making of the sole member companies are also not affected by the new provisions, they may make their resolutions in writing which takes effect upon its communication to the management.

In order to comply with the stay-at-home order, the members’ meeting (i) may be held by electronic means (i.e. videoconference/telephone conference) or (ii) the members may adopt a decision by a written resolution, even if the company’s articles of association does not provide for such option or it regulates the process otherwise. The decree also sets out certain requirements, such as identification requirements at the members’ meetings held by electronic means or procedural requirements for written voting procedures. If it is not possible to hold a members’ meeting in line with the above mentioned provisions, the management is entitled to decide on several subjects, for example to pass a decision on the approval of the annual financial report, on the payment of dividends, and also on matters which would fall within the members’ competency, provided that resolving such matter is urgent and necessary to maintain the lawful operation of the company.

Furthermore, if the mandate of the executive officer expires or he resigns during the state of emergency, he must remain in his position for 90 days after the end of the state of emergency and he is obliged to perform his related duties, unless a resolution of the members provides otherwise.

The term during which the new provisions are applicable has not yet been determined; their end date will be specified by a further decision of the Government or the Parliament.