The House of Representatives, on Wednesday (October 6), approved the Companies (Amendment) Act, 2021 to allow shareholder meetings to be held virtually or in a hybrid format.
Minister of Industry, Investment and Commerce, Hon. Audley Shaw, who piloted the legislative measure in the House of Representatives, noted that the restrictions under the Disaster Risk Management Act (DRMA) prevented many companies from holding annual general meetings within 15 months of their last meeting, as mandated by Section 126 Subsection 1 of the Companies Act.
The DRMA Enforcement Measures Order 2021 includes a restriction on public gatherings and requires persons to maintain various distances apart from each other as part of COVID-19-prevention measures.
Minister Shaw said that since many companies had more shareholders than the number of persons permitted by the DRMA to gather, those companies were unable to hold in-person general meetings in compliance with the Act, noting that this poses the possibility of sanctions being imposed.
“Considering the above, a decision was taken to amend the Companies Act, so as to strengthen the existing legislation in order to provide for the holding of any general meeting, such as an annual general meeting or an extraordinary general meeting, as a virtual-only meeting completely electronic or a hybrid meeting – a combination of in-person and virtual, where this is not expressly prohibited by the articles of a company,” he said.
Mr. Shaw said it also seeks to empower the Registrar of Companies to grant an extension of time for the holding of an annual general meeting on the application of a director of a company or any member who is entitled to vote at the meeting, where an order has been made under the DRMA or a proclamation has been made by the Governor-General declaring a period of public disaster or a period of public emergency under Section 20 of the Constitution of Jamaica.
He added, too, that it will provide for conditions necessary for the holding of hybrid meetings or completely electronic meetings, which ensures participation of all members in attendance.
“The primary and overarching purpose of these amendments is to be able to accommodate the difficulties and unprecedented nature of the time that we are operating in and to allow companies to continue to be able to abide by the rules and this allows them to have completely virtual meetings or hybrid meetings,” Minister Shaw said.
In supporting the amendments, Leader of Opposition Business in the House, Phillip Paulwell, said they are necessary and urgent.
“In the interim, individual companies whose annual general meetings are due would have had to go case by case to the Registrar to ask for exemptions. In a situation where you have had such widescale disaster as we have experienced during this pandemic, it really calls for a mechanism to allow for a general management of the situation, and the amendment allows for that to happen,” he said.