Cooperatives May Hold Virtual Annual Meetings in Fall 2021
As we enter the fall season in which many cooperatives and condominiums hold their annual meetings, the question arises as to whether this year’s meetings should be held in person or virtually. At this time, the previous executive orders that restricted the number of people allowed to assemble in one place have expired. Thus, boards that wish to hold their building’s annual meetings in person are free to do so.
However, based on continued concerns about COVID-19 and the delta variant, some buildings may prefer to hold their annual meetings virtually this year. Temporary legislation allowing New York corporations to hold shareholder meetings in an all-virtual format remains in effect through December 31, 2021. This legislation applies directly to cooperatives, and many condominiums have relied on it to hold virtual unit owner meetings as well.
It is not yet known whether the legislative authorization for all-virtual meetings will continue beyond the end of this year. However, even if that authorization expires, before the pandemic the Legislature adopted a separate amendment to the Business Corporation Law authorizing partially virtual shareholder meetings. Under this procedure, the shareholder meeting is convened in a physical location, where shareholders are able to attend in person, but other shareholders are afforded the ability to participate by video or telephone.
Although everyone is far more experienced with online events today as compared to before the pandemic, both all-virtual and partially virtual meetings require careful advance planning, especially when there is a contested election for the Board of Directors or Board of Managers. Boards planning for such meetings should discuss any concerns about the meeting with their advisors, including legal counsel.