New Jersey Now Allows 100% Virtual Shareholders Meetings – Corporate/Commercial Law

The New Jersey Business Corporation Act (the “Act”)
has been amended to allow New Jersey corporations to hold
shareholders meetings remotely, without the necessity of a physical
location for the meeting or a state of emergency. In other words,
New Jersey now allows shareholders meetings that are 100%
virtual.

Prior to the COVID-19 pandemic, the Act allowed a shareholder to
participate in a shareholders meeting remotely, such as by
telephone, but required the corporation to simultaneously hold the
meeting at a physical location. When the pandemic began, the State
of New Jersey restricted the ability of corporations to hold
in-person shareholders meetings. As a result, in March 2020,
Governor Murphy amended the Act to allow shareholders meetings to
be held remotely during a government-declared state of emergency,
without the need of a physical location.

The most recent amendment to the Act now allows shareholders
meetings to be held remotely (in whole or in part) at any time
without the need for a physical location or a state of emergency.
However, there are certain requirements to hold a remote meeting.
First, the corporation’s board of directors must approve a
remote shareholders meeting and the manner in which such a meeting
will be held.

Next, if a corporation wishes to hold a shareholders meeting
virtually, whether in whole or in part, it must take reasonable
measures to: (1) verify that each person that joins the meeting
remotely is a shareholder, (2) ensure that each shareholder that
joins remotely has a reasonable opportunity to participate,
including the ability to vote and to read or hear the meeting
substantially concurrently with the proceedings, and (3) maintain a
record of shareholder votes, or other actions taken, involving
remote communication.

Finally, an adequate notice of a shareholders meeting must be
provided to shareholders prior to the meeting. Not only must the
notice be given no less than 10 days and no more than 60 days prior
to the meeting, but it should specify the details relating to
remote participation in the meeting. For example, if a meeting will
be held by video conference or teleconference, the notice should
clearly state that the meeting will be held remote and provide the
link or dial-in information to join the meeting remotely.

A New Jersey corporation that may desire to hold virtual
shareholders meetings in the future, particularly 100% virtual
meetings, should review and, where necessary, amend their bylaws to
provide guidelines and procedures for virtual meetings.

The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.