Raffensperger Clarifies Shareholder Meeting Requirements in Light of Covid-19

(Atlanta) -- Secretary of State Brad Raffensperger clarified shareholder meeting requirements for Georgia businesses who are struggling under the threat of COVID-19. Raffensperger has issued a memo explaining that requirements under Georgia law for profit and nonprofit corporations to hold annual shareholder meetings allow for virtual meetings. This provides relief to corporations trying to balance their responsibilities to their shareholders, their obligation to follow the law, and the new restrictions implemented to stop the spread of COVID-19.

“Clarity and certainty under law will help Georgia businesses that have enough to worry about in these turbulent times,” said Raffensperger. “Especially considering the risk large annual meetings would pose to public health, virtual meetings provide a way for business to meet their responsibilities to their shareholders and to prevent further spread of COVID-19.”

Sections 14-2-701 and 14-3-701 of the Georgia Code require Georgia profit and nonprofit corporations to hold annual meetings at “the place stated in or fixed in accordance with the bylaws.” In the past, Georgia corporations have complied with the Code by holding in person meetings.

Raffensperger’s memo clarifies that “these Code sections do not specifically prohibit virtual or telephone attendance of annual meetings.” Virtual meetings will allow Georgia businesses to comply with the legal requirements to hold annual meetings while also protecting public health from further spread of COVID-19. Restrictions on public gatherings throughout the state, both recommended and required, make large, in-person annual meetings not only dangerous to public health but also possibly unlawful.

The Securities and Exchange Commission has provided guidance for conducting virtual annual meetings in states, such as Georgia, where it is allowed by law. Corporations planning to hold virtual meetings need to notify shareholders, intermediaries in the proxy process, and other market participants “in a timely manner.” Directions for attending, participating in, or voting at virtual meetings need to be shared clearly and precisely with all relevant parties.

See the full guidance here.

See Secretary Raffensperger's memo HERE.

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