Out-Law News | 30 Mar 2020 | 8:03 pm | 1 min. read
The United Arab Emirates (UAE) Securities & Commodities Authority (SCA) has written to public companies to tell them to provide a mechanism for electronic participation and voting in upcoming annual general meetings (AGMs) during the coronavirus pandemic.
The SCA told public joint stock companies they can use electronic voting for their AGMs until the end of April. In a circular (4 page / 74KB PDF), the SCA set out the steps which companies need to take to comply with electronic participation controls for shareholders.
These include notifying shareholders of general meetings through SMS and emails instead of the traditional way of sending registered mail, registering the attendance of shareholders electronically, and recording the meeting through audio or visual means.
The SCA also laid out requirements relating to ensuring that there is a quorum of shareholders present electronically, and the publication of resolutions after the meeting.
Corporate governance expert Nathalia Elhage of Pinsent Masons, the law firm behind Out-Law, said the UAE was one of the most advanced digital economies in the world.
“Dubai first recognised electronic signatures by legislation passed back in 2002. The latest move by a regulator to assist businesses hold AGMs during these exceptional times demonstrates the government’s forward thinking and will be well appreciated,” Elhage said.
Many UAE companies have a financial year end of 31 December, meaning the deadline for ratifying their financial statements by way of shareholder meeting within four months of the year end is now imminent.
Elhage said limited liability companies (LLCs) are permitted to agree the means and protocols in relation to holding general meetings. UAE law does not have a provision covering electronic meetings for LLCs, but the company's memorandum of association may specifically permit this.
Elhage said in the absence of an explicit provision allowing electronic meetings, the shareholders of an LLC may pass a unanimous shareholder written resolution in lieu of a general meeting.
“Going forward, such companies may also look to amend their memorandum of association to specifically permit shareholder meetings to be held remotely,” Elhage said.
26 Mar 2020