New shareholders' rights as from 2012

New legislation amends the convening of and the participation to the general shareholders meeting to improve the information provision to the shareholders. A number of companies should amend its articles of association to implement the changes. Ultimately on 1 January 2012 the articles of association should be compliant with the new legislation.

Scope of the shareholders' rights law

On 1 January 2012 the law of 20 December 2010 regarding the execution of certain shareholders' rights of listed companies (Belgian Official Gazette of 18 April 2011) takes effect. This law is not only applicable to listed companies but also to certain non listed companies. For the non listed companies important measures are optional. This implies that for certain measures - like the organization of an electronic general shareholders meeting - they can provide for in the articles of association without being obliged to do so.

Convening of the general shareholders meeting

For listed companies, as from 1 January 2012 the period to convene the general shareholders meeting is minimum 30 days instead of 21 days. In case a second general shareholders meeting should be convened with the same agenda, since with the first convening the quorum was not reached and the first meeting could therefore not legitimately decide, the minimum period remains 17 days.

The convening system for listed companies through the Belgian Official Gazette and a nationally distributed newspaper is completed. As from 1 January 2012 listed companies should also publish the convocation via the companies' website and media for which it can reasonably be expected that they can arrange for an effective distribution to the public of the European Economic Area (EEA): press agencies, newspaper with an international distribution, (electronic) information providers,..

The minimum information for the convocation for the general shareholders meeting increases (such as place, date, timing, agenda, proposals for decision, different possibilities to attend, formalities). This information should be available on the company's website until five years after the date of the shareholders meeting.

The new law also extends the period to adjourn the general shareholders meeting by the board of directors is case that are informed of an important participation by three to five weeks. The extension of this period only applies to listed companies.

Participation to the general shareholders meeting

One or more shareholders holding al least 3% of the nominal capital, have the right to put items on the agenda and to file propositions for decisions. This is new. This request can be filed in written until 22 days before the general shareholders meeting. Ultimately 15 days before the general shareholders meeting the company will publish the completed agenda.

The (optional) system of the registration date for listed companies becomes obligatory. To be able to participate in the general shareholders meeting, the shares should be registered in the name of the shareholders on the fourteenth day before the general shareholders meeting at 24h00. Ultimately the sixth day before the meeting the shareholder should communicate to the company its intention to participate.

The shareholders of listed and non listed NVs, CVAs, BVBAs and CVs can as from 1 January 2012 participate from distance. This can be done by letter or electronically. This possibility should be explicitly foreseen in the articles of association.

Also electronically voting from distance before the actual general shareholders meeting becomes possible (but not for the CV). The capacity and the identity of the shareholders should be verifiable en the votes should be taken ultimately one day before the meeting.

The board of directors of listed companies has as from 1 January 2012 the right to postpone the decision to approve the annual accounts for a period of five weeks (currently three weeks). This also applies for NVs and SEs.

The new law finally clarifies the question right of the partners and shareholders which they can exert orally (during the general shareholders meeting) or in written (electronically before the general shareholders meeting). These clarifications apply to listed and non listed BVBAs, CBVAs, NVs, SEs and SCEs. The directors and commissioners of the company are obliged to answer to the questions of the partners and shareholders provided that the communication of the information in the answers does not have any negative effect on the business interests of the company or on the confidentiality engaged into by the company or its directors or commissioners. Previously the criterion was that the answer should not cause harm to the company, shareholders or staff.