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Bill Grants Charities The Right To Hold Virtual Meetings

Thu May 28 2020

A Bill that would allow Not-For-Profit organisations the right to hold virtual board meetings has passed the first stages in Parliament

The Corporate Insolvency and Governance Bill (as it’s called) will allow Not-For-Profits to hold board meetings and AGM’s virtually, even if their constitutions had previously forbade it.

Th Legislation passed the first stage to becoming law only last week after it had its first reading in the House of Commons on the 20th May.

 

Once it’s passed it will relax some of the corporate governance laws that some charities have been struggling with during the COVID-19 lockdown.

It should be pointed out however that the new legislation will only apply to charitable companies, charitable incorporated organisations and community benefit societies…not however to unincorporated organisations.

 

The new Bill would let members attend meetings virtually using apps like Microsoft Teams or Zoom with no requirement for the meeting to have a specific physical location… even if a charities governing documents says they must.

Further, it would allow votes to be cast electronically or in a variety of different formats that may also not be set out in the governing documents.

And finally, any Not-For-Profit required by their constitution to hold an AGM during lockdown would be granted the right to postpone till at least September if they required.

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The flexibility to hold meetings in ways that aren’t currently permitted under an organisation’s governing document will be particularly helpful for companies, charities and mutuals that have urgent resolutions to be passed by their members over the next few months, such as in relation to the appointment of board members

Many organisations have been grappling with how to hold virtual or hybrid meetings to comply with government guidelines on social distancing, while ensuring that resolutions are passed in accordance with constitutional and statutory requirements.

Simon Steeden – Partner, at the law firm Bates Wells

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Under the current legislation these measures would be temporary, lasting till the 30th September although they could be extended if needed.

 

The bill is due to have its second reading in the House of Commons on 3 June.

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Thu May 28 2020

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