Measure to Apply During Declared State of Emergency
To minimize business disruptions during a state of emergency declared by the Governor, legislation to provide corporations greater flexibility in how they hold their shareholder meetings was signed into law by the Governor on Friday.
While existing law has permitted shareholders of public and private corporations to participate in annual shareholder meetings remotely, the meetings must occur at a physical location. Under the new law (A-3861), the board of directors of a corporation will be allowed, at their discretion, to adopt guidelines and procedures to hold a meeting in part or solely by remote communication not at any one place or physical location.
Assembly Democrats Rob Karabinchak (D-Middlesex), Gordon Johnson (D-Bergen) and Majority Leader Lou Greenwald (D-Camden, Burlington), sponsors of the law, issued the following joint statement:
“Allowing shareholders to conduct meetings virtually without having to be together in a physical location is critical in times of public emergency. Whether in support of social distancing efforts today to stem the spread of coronavirus or in the case of future state emergencies, this law is crucial to business continuity.
“Remote meetings also create an opportunity for broadened accessibility and participation in shareholder meetings to ensure that everyone can have a voice in the matters vitally important to the future of their company.”
The full Assembly approved it 64-0 on Monday March 16 and it was passed 34-0 by the Senate on Thursday March 19.