To try to give corporations a reprieve during the COVID-19 outbreak and consequent community quarantine measures imposed by the government, the Securities and Exchange Commission (“SEC”) issued Memorandum Circular No. 9, Series of 2020 on 18 March 2020 (the “Memorandum”) providing for the guidelines for submission of the General Information Sheet (“GIS”) for the annual stockholders’ meeting for stock corporations or annual members meeting for non-stock corporations to elect its directors, trustees or officers scheduled to be held between 01 March 2020 and 31 May 2020 (the “Covered Period”). The Covered Period may be extended by the SEC, when necessary.
The scenarios which fall within the scope of the Memorandum are as follows: (1) the annual meeting is held during the Covered Period; (2) No annual meeting is held due to health and safety reasons relating to COVID-19; and (3) No annual meeting is held for other causes.
For instances falling under Scenario 1, the GIS may be submitted through mail, private courier, or email within 30 days from the date of the actual meeting. For submissions through email, hard copies must be filed within 30 days from the lifting of the emergency/outbreak with a copy of the email notification attached for reference. No penalties are imposed for the submission under this Scenario.
Meanwhile, in Scenario 2, if no annual meeting is held due to health and safety reasons relating to COVID-19 and the corporation has no facilities for remote communication, the non-holding shall be reported to the SEC within 30 days from the date of the original meeting through mail, courier, or email with an indication of the new date for election, which must be within 60 days from the original meeting.
The 3rd Scenario is when no annual meeting is held within the Covered Period due to reasons other than for health and safety due to COVID-19, or non-holding on dates outside the Covered Period. Non-holding shall be reported to the SEC within 30 days from the date of the originally scheduled election, specifying the new date for election which must be held no later than 60 days from the original meeting date.
A scheduled election which is reported to be not held due to health and safety reasons due to COVID-19 may later be considered to fall under Scenario 3 if any stockholder, member, director or trustee notifies the SEC of the same, and upon verification, non-holding is found to be not related to COVID-19.
Additionally, if the non-holding of election is found to be unjustified, the SEC is authorized to order the issuance of a notice indicating the time and place of the annual election.
Under Scenarios 2 and 3, the GIS for the election held on the new meeting date must be submitted within 30 days from the time the meeting was held. Penalties will be imposed on the submissions under Scenarios 2 and 3 for late submission of the GIS.