Extraordinary measures in the corporate-commercial field established in Royal Decree law 8/2020

Commercial and Corporate Department Circular


Royal Decree Law 8/2020 of 17 March, on extraordinary emergency measures to deal with the economic and social impact of COVID-19, came into force on 18 March 2020.

This royal decree-law establishes extraordinary measures that are important for business and will apply during the state of emergency declared in Royal Decree 463/2020 of 14 March.

The extraordinary measures of a commercial and corporate nature established in Royal Decree Law 8/2020 are as follows:

 

  1. Holding of sessions of governing bodies and adoption of resolutions
    1. Even if the Articles of Association do not provide for it, meetings of the governing and administrative bodies of associations, civil and commercial companies, the governing councils of cooperative societies and the boards of trustees of foundations may be held by videoconference link. The videoconference link must in all cases ensure authenticity and a bilateral or plurilateral connection in real time with image and sound from the remote attendees.
    2. Likewise, even when the Articles of Association do not provide for it, the resolutions of the governing bodies and the entities indicated above may be adopted by means of a written vote without a meeting, either when the president so decides or when at least two members of the governing body request it. The adoption of resolutions in writing and without a meeting must comply with the provisions of Article 100 of the Commercial Registry Regulations, even if they are not commercial companies.

Both when meetings are held by videoconference link and when resolutions are adopted in writing and without a meeting, the meeting shall be deemed to have taken place at the entity’s registered office.

2. Annual accounts and verification by the auditor

  1. The term for drawing up the annual accounts has been suspended. This suspension is established until the end of the state of emergency, and the term will resume again for three more months, from that date.
  2. Where the governing body or administrative body of a corporate entity required to audit its accounts has already drawn up the accounts for the financial year before the date of the state of emergency, the period for verification of the annual accounts by the auditor is extended by two months from the end of the state of emergency.

3. Calling and holding of Ordinary General Meetings

  1. The ordinary general meeting must be held within 3 months of the end of the period for drawing up the annual accounts. That is to say, within 6 months of the end of the state of emergency.
  2. If the Ordinary General Meeting has already been called on the date of the declaration of the state of emergency, but is to be held after the declaration of the state of emergency, the administrative body may modify the place and time scheduled or revoke the agreement to call the meeting by means of a notice published on the company’s corporate website or, failing that, in the BOE (Official Spanish State Journal), 48 hours in advance.

In the event of the revocation of the notice convening the meeting, the administrative body must issue a new notice within the month following the end of the state of emergency.

4. Use of electronic media for drawing up notarial acts

If a notary has been required to attend and take minutes at a general meeting of shareholders, he/she may use real-time remote communication means to ensure that the notarial duties are fulfilled.

5. Right of separation

Even if there is a legal or statutory cause, the partners of capital companies may not be separated from the company until the end of the state of emergency.

6. Refund of contributions

The reimbursement of the contributions of cooperative members who leave while the state remains in force is extended until 6 months after its end.

7. Dissolution of companies

  1. If, during the period that the state of emergency remains in force, the term for which a company is established in its articles of association expires, its full dissolution will not take place until 2 months have elapsed following the end of the state of emergency.
  2. When there are legal or statutory grounds for a company’s dissolution before and during the state of emergency, the period during which the administrative body is required to call the general meeting of shareholders for the adoption of the dissolution resolution or the measures that give rise to the grounds for dissolution will be suspended until the end of the state of emergency.
  3. When the legal or statutory grounds for dissolution arise during the period of the state of emergency, the directors will not be liable for the corporate debts incurred during that period.

8. Listed companies

The following exceptional measures apply to public companies with securities admitted for trading on a regulated market in the European Union:

  1. The period for publishing and submitting the annual financial report to the CNMV and the audit report on its annual accounts is extended to six months from the end of the financial year. This period will be extended to four months for the publication of the interim management statement and the half-yearly financial report.
  2. The ordinary general meeting of shareholders may be held within the first ten months of the financial year.
  3. Although not provided for in the Articles of Association, the board of directors may provide for remote voting in its notice convening the general meeting, and it may provide for the meeting to be held anywhere in Spain. If the notice has already been published on the date of entry into force of Royal Decree Law 8/2020, any of these cases may be provided for in a supplementary notice to be published at least five calendar days before the date on which the meeting is to be held.
  4. If, by order of the authorities, the general meeting cannot be held in the physical place and venue established in the notice convening the meeting, and the power indicated in the previous point cannot be used:
    • When the meeting has been validly constituted in that place and headquarters, it may be agreed by the meeting to continue to hold it on the same day in another place and headquarters within the same province, establishing a reasonable period of time for the transfer of those attending.
    • When the meeting cannot be held, the holding of the meeting at a later date may be announced, with the same agenda and announcement requirements as the meeting that is unable to be held, at least five days before the date set for the meeting.

In this case, the administrative body may agree in the supplementary announcement to hold the meeting exclusively via electronic media, provided that the possibility of participating in the meeting in accordance with each and every one of the following conditions offered:

              1. the meeting may be attended remotely via electronic means;
              2. proxies may be granted to the Chairman of the Board by means of remote communication; and
              3. early voting may take place via remote communications media.

Any of these conditions for participation in the meeting may apply, even if they are not provided for in the Articles of Association, provided that they are accompanied by reasonable safeguards to ensure the identity of the subject exercising his or her voting rights.

5. The resolutions of the Board of Directors and the resolutions of the Audit Committee may be adopted by videoconference link or by multiple telephone conference, even though this possibility is not provided for in the Articles of Association.

9. Registration deadlines

The expiry period for the presentation of entries and registrations that may be cancelled due to the passage of time is suspended. This period will resume on the day following the end of the state of emergency.

10. Deadline for applications for insolvency proceedings

    1. A debtor who is in a state of insolvency shall not be obliged to file for insolvency proceedings during the state of emergency. The judges will not admit for processing the necessary applications for insolvency proceedings filed during the state of emergency or during the two months following its completion. If an application for voluntary insolvency proceedings has been submitted, it will be admitted for processing, with preference, even if it is at a later date.
    2. Debtors who have given notice of the commencement of negotiations with creditors in order to reach a refinancing agreement, or a judicial settlement agreement, or to obtain adherence to an early proposal for a settlement, even if the deadline set out in Article 5bis(5) of the Bankruptcy Law has expired, shall not be obliged to apply for a declaration of bankruptcy while the state of emergency is in force.