The Estonian parliament (Riigikogu) began processing a draft law submitted by the Ministry of Justice which allows the governing bodies of all Estonian companies to entirely or partly pass resolutions by way of both digital and physical meetings.
In addition, all the highest governing bodies of companies will be able to vote without convening physical meetings. The procedure for advance voting by shareholders and stockholders will also be simplified, while the option of passing resolutions in written form, if consensually approved, will be retained. This means companies will be given a variety of options to pass resolutions.
This legislation was called for by several organisations that also assisted in drafting it ‒ Sorainen was among the contributors.
Collective effort to move the bill forward
To provide companies with legitimate options to carry out their daily management, the Estonian Bar Association, the Estonian Insurance Association, Nasdaq Tallinn, the Estonian Private Equity and Venture Capital Association, FinanceEstonia, the Chamber of Notaries and the Estonian Employers’ Confederation approached the Legal Affairs Committee of the Riigikogu and the Justice Minister on 27 March 2020 with a proposal to allow digital meetings, simplify advance voting and extend the deadline for filing 2019 annual reports.
Based on the proposal, the Business Law Commission of the Estonian Bar Association additionally prepared and submitted the draft law as well as a draft explanatory memorandum. Sorainen contributed to the initiative through partner Piret Jesse, who serves on the Estonian Bar Association’s board and the Business Law Commission.
While drafting the bill and the explanatory memorandum, both the proposals made by the Business Law Commission of the Estonian Bar Association and the Justice Ministry’s Corporate Law Audit Workgroup were taken into account. Sorainen partners Karin Madisson and Piret Jesse contributed to the draft as members of the Justice Ministry’s Corporate Law Audit Commission.
Piret Jesse noted that as far as corporate law is concerned, the current crisis is bringing positive developments, allowing a dramatic and long-overdue modernising of regulation on passing resolutions.
No delays for filing annual reports As Justice Minister Raivo Aeg said in a government press release: “Although using digital means is especially important at this very moment, the solutions provided by the bill are meant to be used also after the state of emergency ends”.
The only proposal made by the Bar Association not taken into account was extending the deadline for filing 2019 annual reports. With the new digital options, no company should have problems with filing their reports on time, Piret Jesse said.