Further legal changes and additions to association and foundation law at the turn of the year 2020/21 with regard to measures to combat the effects of the COVID-19 pandemic
1.
Article 11 of the above-mentioned law partially rewrites and supplements the current association and foundation law provisions in Section 5 GesRuaCOVBekG (Federal Law Gazette I p. 569, 579-572), which came into force on March 28, 2020.
Specifically, the following changes and additionshave been made to the special provisions of Section 5 GesRuaCOVBekG that have been in force since March 2020:
In contrast to the previous version of Section 5 para. 2 no. 1 GesRuaCOVBekG , "the management board may, even without authorizations in the articles of association" not only - as previously: "enable", but now - "provide that members of the association may or must participate in the general meeting without being present at the place of the meeting, and exercise membership rights by means of electronic communication".
According to the explanatory memorandum to the law, the legislator thus wishes to ensure and clarify that the board of directors can, as one of its options for action , determine further than before that the members of the association "can only participate in the general meeting by means of electronic communication and that no member can demand that he or she be allowed to participate at the place of the meeting where the board of directors chairs the general meeting" (BT-Drs. 19/25322, page 22).
This - as well as the other amendments and additions to Section 5 GesRuaCOVBekG - means that the aim of reducing social distancing and contact as far as possible in the fight against and containment of the COVID-19 pandemic, which is laid down in the various ordinances of the federal states based on the Infection Protection Act, is now even better implemented in association law (and also in foundation law via the new para. 3a).
For (voluntary) association boards in particular, this leads to a not inconsiderable improvement in their legally secure options for action. This is because it provides them with a legal regulation that also gives them a concrete guideline as to what is legally possible in practice in order to protect the rights of association members while reducing physical distancing and contact as far as possible. In my experience, this has repeatedly been a practical problem, especially in recent weeks.
The legislator has also created an additional clarification that is very important in practice with the newly inserted Section 5 (2a) GesRuaCOVBekG:
"By way of derogation from Section 36 of the German Civil Code, the management board is not obliged to convene the ordinary general meeting provided for in the articles of association as long as the members are not allowed to meet in one place and it is not reasonable for the association or the association members to hold the general meeting by means of electronic communication."
The legislator has stated the following reasons for this and also specified when this unreasonableness is given:
"Many small associations [...] do not have sufficient resources to hold the general meeting as a virtual general meeting in accordance with Section 5 (2) GesRuaCOVBekG. There are also associations that have predominantly older members who are not willing or able to participate in a virtual general meeting. Many board members are currently unsure how to act in these cases. The new Section 5 (2a) GesRuaCOVBekG is intended to create legal certainty here. It should be made clear to board members that they can postpone the ordinary general meeting as long as face-to-face meetings are not possible and a virtual general meeting cannot be held with reasonable effort for the association and the members." (BT-Drs. 19/25322, page 22)
In my experience, especially in recent weeks, there has also been a great deal of uncertainty among many - and especially, but not only, among voluntary - association board members as to whether they still have to convene and hold an ordinary general meeting, which is mandatory in the association's articles of association, in the ongoing acute pandemic situation. Quite a few association statutes also stipulate that such meetings must be convened and held within a certain period of time. Questions have often arisen as to whether this is also the case if face-to-face meetings are/were no longer possible at all or at least no longer (theoretically) possible for the number of all members willing to participate in accordance with the respective coronavirus regulations of the federal states. And this even, if necessary 'by hook or by crook', completely or partially virtually according to the possibilities of Section 5 GesRuaCOVBekG? Even if the association or its membership structure is not suitable for this?
The legal clarification in Section 5 para. 2a GesRuaCOVBekG now resolves the previously difficult trade-off between protection against infection and the actual creation of an opportunity to exercise members' rights to the effect that no ordinary general meeting has to be convened and held - not even fully or partially virtually - until face-to-face meetings are possible again. This is a major improvement for the practice of association boards.
2.
On the other hand, it remains unclear and therefore incomprehensible why Section 5 (2) no. 2 GesRuaCOVBekG continues to provide the option for the board of directors to conduct postal votes or postal votes of association members only "in writing". Unfortunately, the legislator has missed the opportunity to clarify that text form and thus also voting by email or other electronic means of communication is also possible for this option.
Instead, the legally compliant approach in practice in this regard - together with important voices in the literature on association and foundation law (such as Segna, npoR 2020, 148, 151) - will unfortunately have to continue to assume, with reference to BT-Drs. 19/18110, page 30, that the strict written form is therefore exclusively and mandatorily required for this option.
3.
The additional new Section 5 (3a) GesRuaCOVBekG provides further legal clarification to the effect that all options for passing resolutions and exercising rights arising from Section 5 (2) and (3) GesRuaCOVBekG also apply to the management boards of associations and foundations (with legal capacity) as well as to other association and foundation bodies:
"Paragraphs 2 and 3 also apply to the board of directors of associations and foundations as well as to other association and foundation bodies."
This was previously controversial - despite the system of references in the German Civil Code (see section 28 and sections 28, 86 sentence 1), which were already provided for before the COVID-19 pandemic - also for association and foundation boards and even more so for other bodies of associations and foundations.
The explanatory memorandum to the law states the following regarding this clarification: "It is disputed whether Section 5 (2) and (3) GesRuaCOVBekG also applies to the board of directors of associations and foundations as well as to other bodies of associations and foundations where there is also a need to hold meetings by means of electronic communication and to pass resolutions outside of meetings. In order to create legal certainty for associations and foundations in this respect, it should be expressly stipulated that Section 5 (2) and (3) GesRuaCOVBekG also applies to association and foundation boards and other optional association and foundation bodies in addition to the general meeting." (BT-Drs. 19/25322, page 22)
4.
The entry into force of the further amendments to the law on associations and foundations presented in this article, which according to Art. 14 para. 3 of this law is (only) planned for 28.02.2021, is justified in the explanatory memorandum to the law "so that the legal forms affected can adapt to the changes and take organizational precautions." (BT-Drs. 19/25322, page 24).
This is perfectly understandable for the changes to the right of shareholders to ask questions under stock corporation law, which were also adopted in Art. 12 of this law.
In my opinion, however, at least the above-mentioned simplifications and clarifications under association and foundation law - or at least Section 5 (2a) GesRuaCOVBekG - should have been excluded from this so that they could also come into force on the day after the law was promulgated, i.e. on December 31, 2020.
This is because by not coming into force until 28.02.2021, the legal uncertainties that have arisen in practice with the previous version of Section 5 (2) and (3) GesRuaCOVBekG will remain until then. As good and valuable as it is that these clarifications and additions to association and foundation law have now been adopted, the aim of implementing these additions and clarifications immediately, as stated in the explanatory memorandum, will not be achieved immediately. It is a pity that too little differentiation has been made here with regard to the entry into force of the amendments under stock corporation law.
Nevertheless, the now promulgated law will provide a certain guideline that can be used as a basis for the board of directors to consider not convening a general meeting, despite the obligation to do so in the articles of association, until meetings may be held in person again.
5.
These legal options for action - even without corresponding provisions in the articles of association - apply until December 31, 2021. This is provided for in Section 7 (5) GesRuaCOVBekG, which was amended by Article 11 (3) (b) for 2021.
Under the current legal situation,associations and foundations that still wish to make use of these options in 2022 must therefore amend their articles of association accordingly in 2021 if they do not yet provide for this.
Status: 31.12.2020