Amendments to the Companies Act are approved by the House.
The House of Representatives approved the Companies (Amendment) Act, 2021 on Wednesday (October 6), allowing shareholder meetings to be held online or in a hybrid format.
Hon. Audley Shaw, Minister of Industry, Investment, and Commerce, who piloted the legislative measure in the House of Representatives, noted that the Disaster Risk Management Act (DRMA) restrictions prevented many companies from holding annual general meetings within 15 months of their last meeting, as required by Section 126 Subsection 1 of the Companies Act.
As part of COVID-19 preventative efforts, the DRMA Enforcement Measures Order 2021 prohibits public meetings and forces people to keep varying distances apart from one another.
Minister Shaw stated that because many firms had more shareholders than the DRMA allowed to gather, such companies were unable to hold in-person general meetings in accordance with the Act, and that this could result in sanctions being levied.
“In light of the foregoing, a decision was made to amend the Companies Act in order to strengthen the existing legislation to provide for the holding of any general meeting, such as an annual general meeting or an extraordinary general meeting, as a virtual-only meeting completely electronic or a hybrid meeting – a combination of in-person and virtual, where this is not expressly prohibited by the articles of a company,” he said.
According to Mr. Shaw, it also seeks to empower the Registrar of Companies to grant an extension of time for the holding of an annual general meeting on the application of a director of a company or any member entitled to vote at the meeting where an order has been made under the DRMA or a proclamation has been made by the Governor-General declaring a period of public disaster or a period of public emergency under Section 20 of the Jamaican Constitution.
He also stated that it will establish the conditions for hosting hybrid or entirely electronic meetings, ensuring the participation of all members in attendance.
“The primary and overarching purpose of these amendments is to be able to accommodate the difficulties and unprecedented nature of the time that we are operating in, and to allow companies to continue to be able to abide by the rules, allowing them to have completely virtual or hybrid meetings,” Minister Shaw explained.
Phillip Paulwell, Leader of the Opposition Business in the House, backed the amendments, calling them “essential and urgent.”
“In the interim, individual firms with upcoming annual general meetings would have had to approach the Registrar on a case-by-case basis to request exemptions.” “When you have such a large-scale tragedy as we have had during this epidemic, it truly calls for a system to allow for general management of the issue, and the amendment enables for that to happen,” he added.