When Are Virtual Corporate Meetings Legal?
As the pandemic continues, most companies have started to adapt. Those adaptations likely include meeting with shareholders, board members or officers virtually. Many made the transition out of necessity, and in most cases, virtual meetings won’t be challenged or invalidated by courts. Virtual meetings of all kinds are generally legal, so long as certain safeguards exist. Still, it’s good to make sure that you are meeting virtually in the correct way.
Follow the Corporate Documents
At the risk of repeating ourselves, as we say this often—the legality of meeting virtually will usually depend on your corporate documents. If your documents require in person meetings, then it is likely that virtual meetings may not be permitted or legal for your company.
On the other hand, even if in person meetings are required, many corporate documents have provisions that emergency measures can be taken to ensure the proper functioning of the company, and virtual meetings during a pandemic may constitute emergency measures, making the meetings legal, even if the corporate documents say or suggest that in person meetings are required.
What Florida Laws Say
If your corporate documents are silent about virtual meetings, then their legality will default to what Florida laws say.
LLCs are the easiest, as LLCs aren’t even legally required to hold annual meetings. As a general rule, and unless your corporate documents say otherwise, so long as everyone in the meeting can hear and participate, holding the meeting virtually is legal.
For other kinds of corporations, the legality depends on the type of meeting. Shareholder meetings will usually require that virtual meetings be authorized by the company’s Board of Directors. The Board can authorize such meetings if everyone can hear, and participate. Additionally, a record of shareholder actions, such as voting, must be kept by the company when the votes take place by remote communication. There also must be some means to determine that every shareholder that will vote, is who they say they are (that is, to verify shareholder identity).
The same rules hold true for meetings of members of nonprofit companies.
Board meetings are more flexible, and can almost always be held virtually, again, unless your corporate documents say otherwise. In fact, even a (non video) phone call is authorized by Florida law, so long as everyone can simultaneously hear each other.
The same rules hold true for meetings of board members of nonprofit companies.
If there is an emergency that prevents a full board from meetings, a Board that is not a quorum can take certain emergency measures to ensure the functioning of the company. However, as we are months into the pandemic, it is unlikely that the inability to meet in person would be considered an emergency at this point.
Call the West Palm Beach business litigation lawyers at Pike & Lustig to help you with the day to day operations of your business, and to make sure your business is in compliance with the law.