Do governing bodies have any special duties and responsibilities within the context of COVID-19 events?

To the best of our knowledge, no COVID-19-related provision/measure has been specifically adopted in Equatorial Guinea in this respect. Yet, Decree 42/2020 sets forth that, “Considering that COVID-19 is a Public Health problem affecting all, all should fight against it and all structures and layers of Society are required to join the efforts of the Government and Ministry of Health, with them contributing to the most and overseeing compliance with the measures adopted” – a provision which, according to our best interpretation, is still deemed in force. At the same time, the LPCP sets forth that, in the case of emergency or calamity situations, all citizens, entities and State Bodies have the right (inter alia) to (i) receive information on the risk that may affect them as a group; (ii) be briefed on the measures taken to prevent/mitigate said risk; and (iii) be provided with information and instructions on the safety measures that they must adopt and those that must be followed (failure to comply with this obligation qualifies as a minor infraction punished with a fine). Finally, under the applicable corporate law, companies’ governing bodies are subject to special duties of care in the management of the risks inherent to the COVID-19 threat.

Accordingly, companies (through their governing bodies) should at least:

  • Prepare and implement contingency plans geared at continuing their business and the safety of their employees, shareholders, customers, suppliers and other stakeholders;
  • Inform the NCSTC of any material sign of COVID-19;
  • Adjust their commercial strategies to minimize and overcome any issues that may arise from the economic, financial and commercial impacts that materialize or that may foreseeably have an impact on their business or to third parties as a result of the COVID-19 outbreak; and
  • Make all the above plans and measures known to all layers and structures of the company, so that they are implemented, monitored and revised, if appropriate.

As members of governing bodies may be held liable for the absence of such plans/measures or for losses arising from the failure to communicate them, it is equally important that the process of setting up and approving such plans/measures by the company’s decision-making bodies is guided by rational business criteria and be duly documented.

 

Should we reconsider in-person meetings of the corporate bodies?

Under the applicable corporate law it is possible to hold meetings not in-person, provided said possibility is set forth in the Bylaws of the company. If these conditions are met, and although, to the best of our knowledge, no COVID-19-related provision/measure has been specifically adopted in Equatorial Guinea in this respect, we take the view that, you should reconsider in-person meetings to comply with the general cooperation provision in Decree 42/2020. If the conditions are not met, some other solutions may be sought, but have to be reviewed on a case-by-case basis.

Under same corporate law, companies are required to hold an annual general assembly meeting to (inter alia) approve their financial statements. The deadline is the 30th of June of each year. In the case of joint stock companies (or SA companies), the Board of Directors needs to meet beforehand to (inter alia) prepare the financial statements that will be submitted to the company’s auditors forty-five (45) days prior to the date of the annual General Assembly of shareholders that will discuss them. A similar obligation exists in the case of the management of private limited liability companies (or SARL companies), that must also prepare the company’s financial statements for approval.

Within one (1) month from their approval/rejection, corporate documents should be filed with the Trade Registry. Failure to comply with this obligation triggers governing bodies’ liability. Again, as far as we can determine, no COVID-19-related provision/measure has been specifically adopted in Equatorial Guinea in this respect.

 

When and on what terms should I inform the market of any strategic decisions and/or negative impacts on the company’s business?

Companies must assess the potential impacts of COVID-19 on their business and keep the shareholders updated of such assessment and status at all times, pursuant to the applicable law.

 

 

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This information is being updated on a regular basis.

All information contained herein and all opinions expressed are of a general nature and are not intended to substitute recourse to expert legal advice for the resolution of real cases.