2021-11-08

“Virtual Shareholders’ Meetings” May Become the “New Normal” in 2022

Due to the ongoing Covid-19 pandemic, Taiwan’s Ministry of Economic Affairs (“MOEA”) has permitted companies to postpone holding shareholders’ meetings until 31 August 2021 without filing with the MOEA, or to advance petition the MOEA for permission to postpone a shareholders’ meeting until 31 December 2021.  For public companies, the Financial Supervisory Commission (“FSC”) has allowed shareholders’ meetings to be convened with some of the shareholders attending through visual communication networks established by the Taiwan Depository and Clearing Corporation (“TDCC”).  From 16 to 31 August 2021, 17 companies adopted and convened part-virtual shareholders’ meeting.
 
According to Articles 172-1 and 356-8 of the current Company Act, only non-public companies who have provided for the adoption of virtual shareholders’ meetings in their Articles of Association or Incorporation are permitted to hold shareholders’ meetings virtually.
 
Amendments to the above Articles are now under review at the Legislative Yuan, which amendments, if passed, will permit both public and non-public companies to hold virtual shareholders’ meetings without providing for the same in their Articles of Association or Incorporation.  Relevant enforcement rules will be enacted by the FSC, which rules are expected to be completed by March 2022.  Under the new rules, virtual shareholders’ meetings may be convened through platforms other than that set up by the TDCC, and can be categorized as either meetings held completely virtual and partly physical and partly virtual.
 
The FSC will continue to work on relevant regulations to enhance information security and to prevent “Deepfake” crimes from being committed during virtual shareholders’ meetings.
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