Austria: Austria: Facilitation of shareholders’ meetings

In order to prevent the spread of the coronavirus, events are completely prohibited and no more than five people at a time should meet at any one place in Austria. General meetings and shareholders’ meetings in which more than five people are supposed to participate are therefore currently not possible. While this situation may still be manageable for some companies with a small number of shareholders, this poses a particular problem for public companies, as shareholders are in principle free to be physically present at the general meeting.

To solve this problem, the Austrian legislator has made the following changes to the law as of 23.3.2020:

• For the duration of measures taken to prevent the dissemination of COVID-19 according to the COVID-19 Measures Act (Federal Law Gazette I 2020/12), meetings of shareholders and board members may be held without the physical presence of the participants (Article 32 § 1 (1) of the COVID-19 Company Law Act).

• The Federal Minister of Justice has been authorised to issue ordinances laying down more detailed rules on implementation which ensure a comparable quality of decision-making.

The provisions on implementation without physical presence take precedence as lex specialis over deviating provisions in the articles of association. The use of technical means of communication, such as videoconferencing, should make it possible to achieve a comparable quality of decision-making even without holding a meeting in person. Therefore, a legal basis for virtual meetings and other forms of decision-making (e.g. written votes) is to be created on a temporary basis, whereby the detailed regulations for individual or all legal forms of an ordinance are reserved for the Federal Minister of Justice.

However, current developments clearly show that electronic means of communication make an effective contribution to maintaining the ability of companies to act at all times. It remains to be seen whether the current predicament will provide the desirable impetus for a sustainable modernisation and technologisation of the legal framework in this area.