Many areas of business have been impacted; some for the better and some for worse. Who knew that home working would actually lead to deeper insights into our colleagues' lives - meeting the family, video-bombing pets, and scoping the interiors?
But what about some operational flexibilities that make managing your global entities and their activities easier, especially in relation to company secretarial matters and administration?While there may have been several temporary measures to minimise the impact of COVID, some practices are now being made permanent and many countries are working to make business easier post-pandemic. Have you been taking advantage of these practices?
We take a review of some of the key changes impacting multiple countries that, while basic, can be fundamental in making managing day-to-day work that bit easier.
The challenge of obtaining wet ink signatures on documents has been a problem long before COVID, but being trapped in our homes made it all the more difficult. Even if your company directors had a printer at home, ink is a costly resource and arranging a courier for collection and delivery could be a logistical nightmare.
Due to this increased burden, many countries expanded (or even tested) the use of electronic signatures. While the rules may vary (type of signature and its authentication requirements, and even country-specific technology) it certainly helped to alleviate the burdens of the elusive wet ink signature for many filings.
Further, countersigning documents became more acceptable (reducing the shipping of originals between internationally based directors) and some legalisations even moved to Zoom calls.
While the whole world did not relax their signing requirements, for example, legalisations and public notaries are still vitally important in Germany and Spain for filing with the local commercial registers; many of the temporary relaxations in this area have become permanent. Make sure you are using electronic signatures where they are permitted and save the headache of coordinating signatures.
The requirement for having physical meetings has been declining for several years, even before COVID, and especially at subsidiary level. Organising multiple directors to travel to a single location has always been challenging as companies continue to become more global. The reducing requirements for physical meetings, coupled with the use of telephone and video conferencing has helped tremendously.
While some countries had been holding on to this requirement, a number have recently been taking action to remove this hurdle from day to day requirements, introducing relaxations in the law to allow for virtual meetings where physical meetings may have been mandatory. Take the most recent example of Thailand, which has historically had onerous meeting requirements. Their company law amendment from 7th February 2023 will allow for board meetings to be held virtually through video conference rather than require physical meetings.
An additional easing of requirements and law, Thailand will remove the need to publish meeting notices in the newspaper, and focus instead on the more common requirement to send notices to shareholders only. This again takes another step out of the process for meetings.
Similarly, law changes in Switzerland from 1st January this year mean that shareholder meetings can be held virtually, as well as using written resolutions in place of minutes.
While there may be an initial pain of amending your Articles of Association to take advantage of these changes, it is worth the initial investment to save time and cost down the line in countries that have been problematic in the past.
Another common item occurring in the raft of corporate law changes is the number of shareholders required for a company. In instances such as Thailand and Belgium, they have been reducing the number of shareholders required.
In the case of Thailand, the reduction is from three to two shareholders. A relief for many creating a subsidiary company as you can keep your structure simpler with just two shareholders (which makes the organisational chart easier to produce too). This will also make decisions, meetings, etc. much easier in the future.
While this likely comes from efforts to make doing business in certain countries easier, it will also help to make business more practical in the longer term. Again, this may require a change to your articles of association, and then changes to your share structure too. It could be worth it for existing companies to make the change. On the other hand, if you have not entered these countries yet, this may make the process a little easier in selecting your shareholders.
As the world continues to adjust, it is worth monitoring these changes that could impact your entities and make the organisation and completion of decisions and matters a little easier for your internal team. With the initial effort to amend constitutional documents to ensure these flexibilities are embedded in your procedures, you can benefit from the reduced burden in the longer term.
Our Global Entity Management Team provide continued support to businesses, reviewing and implementing changes to operations. Find out how our team can support you with entity management or get in touch with one of our experienced team members at GlobalEntityManagement@dwf.law