On 30 March 2020, the Verkhovna Rada of Ukraine adopted the Law "On Amendments to Certain Legislative Acts Aimed to Ensure Additional Social and Economic Guarantees Due to the Coronavirus Disease (COVID-2019) Spread" (the Law), which introduces to the Ukrainian legislative environment new complex rules aimed at minimizing the negative impact of the spread of the coronavirus disease (COVID-19) in Ukraine. The Law, inter alia, makes a number of important amendments to the legislation governing activities of joint stock companies (the JSCs) and operation of their governing bodies.
In particular, the Law establishes a temporary procedure for calling and holding in 2020 of the JSC general meetings of shareholders (the Meetings) and introduces the following related rules.
- In 2020, the term for holding the annual Meetings, as established by the Law of Ukraine "On Joint Stock Companies" (the JSCs Law), shall not temporarily apply to the JSCs. In addition, holding of the Meetings in 2020 within the term established by the JSCs Law and during the quarantine period introduced by the Cabinet of Ministers of Ukraine to prevent the spread of the coronavirus disease (COVID-19) in the territory of Ukraine (the COVID-19 Quarantine), shall not be considered a violation of the JSCs Law. The annual Meetings dedicated to the 2019 financial year results shall be held by the JSCs no later than three months after the end of the COVID-19 Quarantine.
- If it is impossible to hold the Meetings in accordance with the procedure established by the JSCs Law due to the COVID-19 Quarantine restrictive measures, they may be held remotely in the manner and within the terms to be determined soon by the National Commission on Securities and Stock Market (the Commission).
- Accordingly, the Law obliges the Commission to promptly prepare and approve temporary procedure for calling and remote holding of the Meetings due to the implementation of measures to prevent the emergence and spread of the coronavirus disease (COVID-19). Such a procedure shall not be subject to state registration by the Ministry of Justice of Ukraine and shall enter into force on the day of its official publication through promulgation on the Commission's official website.
- In cases of expiration of JSC supervisory board members' terms of office in 2020, their powers shall automatically extend in full until the date of the Meetings being held in accordance with the new described-above rules.
- The Law introduces amendments to the Law of Ukraine "On Securities and Stock Market" by temporary cancelling for 2020 the deadlines for disclosure of 2019 annual information about a securities issuer, in particular JSC. From now on, such annual information may be disclosed by securities issuers until 30 April 2020 or after this date, in which case it shall be disclosed within 5 business days after the holding of the Meetings in accordance with the new described-above rules.
In addition, the Law also introduces changes to the Law of Ukraine "On Limited and Additional Liability Companies", according to which limited liability companies that issued securities shall in 2020 apply the rules of holding the general meeting of participants, which are similar to respective JSC Meeting rules outlined in paragraphs 1 – 3 above.
To get more information or discuss business and legal implications for your company caused by novel coronavirus outbreak please get in touch with Asters COVID-19 task force at covid19-response@asterslaw.com
