Although holding virtual meetings has been permitted by Cyprus legislation since 2015, it is not the customary practice among Cyprus public or private companies. However, in response to the coronavirus outbreak, we anticipate that many companies will take a closer look at virtual meetings. In this brief, we provide basic guidelines for companies considering a “virtual-only” or “hybrid” Board meetings or general meetings.
What is a “virtual” meeting?
A virtual meeting is a meeting where the participants are not gathered physically in the same location but simply participate through voice or video call on a virtual platform where they can hear each of the other participants and be heard by each of the other participants. Essentially, a virtual meeting takes place through any electronic application which allows the attendees to hear each other.
Is it possible to hold a virtual general meeting of shareholders in a Cyprus company?
As from 2015, the Companies Law Cap. 113 (the Law) allows corporate governance of a company to take place virtually. Section 128(d) of the Law provides that unless expressly prohibited by the articles of association of a company, a general meeting of a company may be held by telephone or by any other means, provided that all participants can hear each other. The Law also clarifies that the persons participating in the general meeting this way are included for the purposes of establishing a quorum and for any other purpose. Further, it provides that a general meeting is deemed to have occurred at the location of the person who keeps the minutes of the meeting, which is usually the secretary of the company.
Is it possible to hold a virtual Board of Directors meeting of a Cyprus company?
Similarly, a Board of Directors may lawfully meet through electronic means. Section 191A of the Law provides that unless there is a reference to the contrary in the company's articles of association, a meeting of the board of directors may be held by telephone or by any other means, provided that the participants can hear each other. Section 191A of the Law further clarifies that (i) the persons participating in the meeting of the Board of Directors this way, are included for the purposes of establishing a quorum and for any other purpose; and (ii) the meeting of the board of directors is deemed to have occurred at the location of the person who records the minutes of the meeting, which is usually the secretary of the company.
What are the rules governing the conduct at the virtual meeting?
The development of rules of conduct before the meeting is generally regarded as a best practice. As to virtual participation, rules may address the opportunity to submit questions in writing before or during the meeting (e.g. a process for online posting of questions), the process for screening, combining and responding (or declining to respond) to questions as well as establish time limitations, guidelines for behaviour and technology support.
The coronavirus is commanding attention and compelling companies to rethink travel and meeting protocols. For Cyprus companies, we expect a continued increase in virtual meetings.