Covid-19 and corporate law

    Covid-19 and corporate law

    Below is a list of frequently asked questions about corporate law during the Covid-19 outbreak.

    Can board meetings be held remotely during the Covid-19 outbreak?

    Yes, provided the articles of association of the company do not expressly prevent it. This will usually only be the case in companies with articles of association that have not been updated in recent years. If in doubt, you should check. If necessary, pass appropriate resolutions to ensure there are no procedural irregularities in holding meetings in this way.

    How can board meetings be held remotely?

    It is generally accepted that meetings can be held by telephone or video conference provided all directors can hear each other and participate in the meeting. Usual quorum and meeting provisions will apply, alongside other best practice guidelines regards consent and minutes.

    Is a company required to notify a director who is ill about a forthcoming board meeting?

    Where a director is extremely ill, guidance indicates that notice of a meeting need not be given to that individual. However, best practice suggests that steps should be taken to advise the director of the proposed meeting, where possible.

    How do I execute documents?

    Documents can be validly executed by the party signing in either ‘wet ink’ or electronic form. The latter may be the only option where a party does not have access to a printer.

    Electronic signing can take many forms, including:

    • an actual signature
    • typing a name into the execution clause of the document
    • adding a name to an email which confirms and expressly assumes responsibility for the contents

    What if I need a witness?

    Where a party is required to sign in the presence of a witness, both the individual signing and the witness attestation must be within the same execution clause. Both parties can sign electronically. To reduce later evidential issues, best practice advises that the witness should be physically present whilst the individual signs rather than witnessing through a live medium, such as video calling or conferencing.

    Even with current social distancing there are ways to achieve this, which we are happy to advise on.

    Are there any restrictions on who can witness?

    Whilst an adult independent witness is preferable for best practice and evidential purposes, a document can be validly witnessed by a signatory’s spouse, family member or co-habitee provided they are not also party to the same document. An individual under 18 years can also witness provided they have sufficient maturity and understanding of their function as witness. These provisions should assist in overcoming certain difficulties posed by the current government requirement to stay at home.

    A party has not signed a contract due to illness - am I bound by it?

    This depends on the intentions of the parties involved and relevant evidence in the circumstances. Influential factors will include:

    • whether individual parties intended to be bound, even if some of the other parties do not enter into the agreement
    • whether it is commercially sensible and workable for those who have entered into the contract to be bound by and perform it, in the absence of other parties agreeing its terms

    Is the ill party bound?

    In absence of an individual signing up to the agreement, it is possible that the terms of it are still binding on that party. This depends on whether there is sufficient evidence indicating that they intended to be bound.

    Provided the key elements of contract formation are satisfied, the absence of a signed copy will not necessarily exclude a party. It is best to seek advice in these circumstances.

    Are there any changes or relaxations to the 21 day period for registration of a charge?

    No, this is a statutory requirement, which can only be extended by the courts.

    How can we help?

    Our Corporate Commercial Team is here for you and your business. Contact us and we’ll make sure the right legal advisor gets back to you.

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    This information is given to the best of our knowledge and does not constitute individual legal advice upon which you can rely. The situation relating to Covid-19 is constantly evolving and may have changed since this document was produced. For up to date advice on your own situation, please contact us before taking any action.

    Last updated 29 April 2020

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