Under two of the Emergency Proclamations issued by Louisiana Governor John Bel Edwards during the COVID-19 emergency, the usual requirements to hold certain in person shareholder meetings have been temporarily suspended. The Proclamations suspend Subpart A of Part 7 of the Louisiana Business Corporation Act (LBCA), including specifically R.S. 12:1-701(B), R.S. 12:1-702(C), and R.S. 12:1-705(A) and (E), if those sections require a physical meeting of shareholders that (a) has a record date that falls during the declared “Public Health Emergency” (currently March 11, 2020 – April 30, 2020), (b) required notice to be provided in connection therewith during the Public Health Emergency, or (c) is scheduled to occur during the Public Health Emergency. You can find the specific Emergency Proclamations here: 37 JBE 2020 – March 26, 2020 and 41 JBE 2020 – April 2, 2020. Keep in mind that the “Public Health Emergency” can be extended or terminated by the Governor under a future Proclamation.
In addition to considering how this suspension may affect future shareholder meetings, all Louisiana corporations should carefully consider how the corporation is able to take actions during these rapidly changing times. Important decisions may be necessary on short notice; contracts or loan documents may need to be negotiated and signed quickly. To be able to survive in this uncertain environment, a corporation must know which officers, agents or directors are properly authorized to act on its behalf by reviewing its Articles of Incorporation, Bylaws and any applicable law.
Finally, every corporation should review its governing documents to make certain that it continues to comply with its governing requirements and that it is knowledgeable about any flexibility provided by those documents or under applicable laws. Common questions include:
Remember that the fiduciary duties of officers and directors are not suspended during an emergency. If you have any questions about your governing documents, the LBCA or any other questions relating to your company, please reach out to your Gordon Arata attorney.