ArticlePDF Available

The Electronic Participation in Corporate Bodies in Lithuania from a Comparative Perspective

May 2024
Utrecht Journal of International and European Law 39(1):1-16

DOI:10.5334/ujiel.615

Authors:

Ivan Romashchenko

University of Cyprus

Virginijus Bite

Mykolas Romeris University

Due to the COVID-19 pandemic, many jurisdictions around the world embarked on a path towards the speedy digital transformation of their corporate governance regulations. Lithuania is one of the countries where electronic participation in the general meetings of shareholders was stipulated back in 2009. Based on the experience gained during the pandemic, this was substantially changed in November 2022. This development raises the question of whether these novelties will suffice, or whether the further enhancement of Lithuanian company law is required. Therefore, this article aims to study the regulation of electronic participation in corporate bodies in Lithuania in a comparative context and to suggest improvements. To achieve this goal, two EU jurisdictions were selected for comparative analysis: Estonia and Germany. In addition, two surveys were carried out among Lithuanian law firms: one in 2022 and the other in 2023. Our study shows that practitioners treat the new amendments as sufficient and effective, but some amendments regarding the identification and verification of shareholders would be welcomed.

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RESEARCH ARTICLE

ABSTRACT

Due to the COVID-19 pandemic, many jurisdictions around the world embarked on

a path towards the speedy digital transformation of their corporate governance

regulations. Lithuania is one of the countries where electronic participation in the

general meetings of shareholders was stipulated back in 2009. Based on the experience

gained during the pandemic, this was substantially changed in November 2022. This

development raises the question of whether these novelties will sufﬁce, or whether

the further enhancement of Lithuanian company law is required. Therefore, this article

aims to study the regulation of electronic participation in corporate bodies in Lithuania

in a comparative context and to suggest improvements. To achieve this goal, two EU

jurisdictions were selected for comparative analysis: Estonia and Germany. In addition,

two surveys were carried out among Lithuanian law ﬁrms: one in 2022 and the other

in 2023. Our study shows that practitioners treat the new amendments as sufﬁcient

and effective, but some amendments regarding the identiﬁcation and veriﬁcation of

shareholders would be welcomed.

CORRESPONDING AUTHOR:

Ivan Romashchenko

Mykolas Romeris University, LT

iromashchenko@gmail.com

KEYWORDS:

digitalisation; corporate

governance; virtual meetings;

electronic participation;

corporate bodies

TO CITE THIS ARTICLE:

Ivan Romashchenko and

Virginijus Bitė, ‘The Electronic

Participation in Corporate

Bodies in Lithuania from a

Comparative Perspective’

(2024) 39(1) Utrecht Journal

of International and European

Law pp. 1–16. DOI: https://doi.

org/10.5334/ujiel.615

IVAN ROMASHCHENKO

VIRGINIJUS BITĖ

*Author afﬁliations can be found in the back matter of this article

The Electronic Participation

in Corporate Bodies

in Lithuania from a

Comparative Perspective

2Romashchenko and Bitė Utrecht Journal of International and European Law DOI: 10.5334/ujiel.615

1. INTRODUCTION

The COVID-19 pandemic fostered the development of

technologies in corporate governance. Since it began,

hybrid and virtual meetings of corporate bodies have

become the reality in many jurisdictions. Even though

the coronavirus era seems to have come to an end,1

a future where electronic means are broadly used in

corporate governance is before us and needs exploration.

Businesses have well realised the advantages of meetings

held using digital technologies. For public companies

with thousands of shareholders the differences in the

cost and convenience of holding a virtual meeting

and renting a hall for an in-person meeting are self-

explanatory. Coupled with the ever-growing trend of

digitisation in many areas of social life and the threat of

potential future pandemics, hybrid and virtual meetings

of shareholders have become the “new normal”.2

Even though meetings held using digital technologies

offer many beneﬁts, they have also brought some serious

risks related to the veriﬁcation of a person’s identity and

the inherent technical problems.3 In addition, the use

of digital technologies has created some obstacles for

minority shareholders in exercising their rights. As the

comparative study of Zetzsche and others has shown,

there is a need to adjust the rules on virtual meetings

of shareholders to make sure that shareholders are

afforded the same rights as in face-to-face meetings,

particularly the right to ask questions and to comment

on resolutions.4 If minority shareholders are not provided

with these rights, it might lead to situations where

managers and controlling shareholders would feel

tempted to abuse their positions. It surely does not

mean that the opinion of the majority shareholders is

not relevant. To the contrary, it is normal in corporate

decision-making that decisions and choices of the

majority prevail over the minority’s.5 However, the

signiﬁcance of protecting minority shareholders’ rights

should not be underestimated. At least several reasons

have been outlined in literature to support the need of

minority shareholders’ protection in a digital age: by

protecting minority shareholders a country contributes

to the competitiveness of its companies and increases

investors’ conﬁdence in its economy.6 Considering the

fact that the future of general shareholders’ meetings

has a digital agenda, where the rights of minority

shareholders may be infringed, it is important to analyse

regulations providing for virtual and hybrid meetings

from the viewpoint of different types of stakeholders,

including minority shareholders.

The article is structured as follows. Part 2 contains

a literature review. Part 3 describes the article’s

methodology. Part 4 deals with the digitalisation of

corporate governance in selected EU jurisdictions, namely

Estonia, Germany, and Lithuania. It is worth mentioning

that the statutes of Estonia, Germany and Lithuania are

investigated in terms of their strong connection to EU

law sources that accelerated digitalisation processes.

Part 5 presents and discusses the results of the two

surveys described above from a comparative perspective

to elaborate recommendations for the improvement

of Lithuanian company law. Finally, Part 6 presents the

conclusion, where the key results and recommendations

are summarised.

2. LITERATURE REVIEW

Publications on virtual shareholder meetings appeared

long before the pandemic started. Delaware was one

of the pioneer jurisdictions in the world to foresee the

possibility of virtual meetings of shareholders for the

years to come.7 According to the 2000 amendments

to the Delaware Code, boards of directors could

authorise participation of stockholders and proxyholders

in a meeting of stockholders by means of remote

communication or in a fully virtual meeting.8 Later several

other states in the US followed Delaware’s lead: the

states’ approaches on this matter were well summarised

and discussed in Fairfax’s paper.9

According to Nili and Shaner’s study, in the ﬁrst decade

after the amendments were adopted, meetings held

using electronic means received mixed feedback: some

companies abandoned the idea of holding them while

others preserved it only on paper.10 It was only after 2009

that the number of virtual shareholder meetings started

to grow considerably every year.11 As Fontenot noted

in her publication, one provider of shareholder meeting

technology, Broadbridge Financial Solutions Inc. reported

a sharp increase in the number of virtual meetings: from

one meeting hosted in 2009 to 53 meetings in 2014, and

then 155 in 2016.12

States in the United States were not the only

jurisdictions where virtual meetings of shareholders were

studied in the 2000s. For instance, Boros in her articles

explored the mechanisms of voting in meetings held

using technologies in Australia, the UK, and the US,13

as well as the basics of legislation dealing with virtual

meetings.14 National legislators and courts in different

countries clearly moved in the direction of recognising

the use of technologies in the activities of corporate

bodies.

Twenty years after the relevant changes in

Delaware, the topic of hybrid and virtual meetings

of shareholders quickly gained relevance due to the

outbreak of COVID-19.15 As has been eloquently stated

in a publication by Fontenot, Bevans, and Nix, it was

the virtual shareholder meeting explosion in 2020.16

The percentage of virtual meetings in 500 of S&P

companies in the US in 2020 increased rapidly from 12

per cent in the ﬁrst quarter to 80 per cent in April to

mid-May.17

3Romashchenko and Bitė Utrecht Journal of International and European Law DOI: 10.5334/ujiel.615

In Europe the wave of COVID-19 in 2020 also led to

the widespread use of digital technologies in corporate

governance. Governments in many European countries

enacted regulations to facilitate meetings of corporate

bodies in companies. Company law studies published in

2020 in Europe focused on the electronic participation

of shareholders in meetings either from a domestic

perspective,18 or from a comparative one. For instance,

Vutt discussed the Estonian experience together with

the laws of Germany and the UK;19 Borselli and Ferrando

Miguel presented a paper focusing primarily on the UK,

Germany, France, Italy and Spain, and occasionally

dealing with other jurisdictions.20 Some scholars analysed

the use of technologies in corporate governance within

the broader set of challenges posed by COVID-19 towards

corporate law.21

In 2021–2023, there were more studies commenting

on the use of technologies in corporate bodies of

European companies and analysing their experience

either in a national,22 or in a comparative context.23

Besides scholarly literature, special reports were prepared

to focus on corporate governance issues following the

crisis, including the ICLEG report24 and the OECD report.25

Lithuania belongs to the group of jurisdictions

where electronic participation in general meetings

of shareholders has been available since before the

pandemic. Due to this, there was no urgency in taking

any governmental measures in response to the COVID-19

outbreak to allow electronic participation of shareholders

in general meetings. However, in November 2022,

new changes to the Lithuanian law regarding general

meetings with electronic participation were adopted.26

These amendments present an interesting legislative

novelty, which raises the question of whether these

changes will sufﬁce or whether more enhancement

of Lithuanian company law is required. These new

changes have not been sufﬁciently studied in the recent

publications on comparative company law. Lithuanian

experience regarding hybrid and virtual meetings of

shareholders has mainly been described and analysed

in the ICLEG and OECD reports on a European or global

scale,27 in the Mikalonienė’s28 publication and succinctly

in Bitė’s paper.29 To ﬁll this gap we aim to focus on the

recent Lithuanian legislative experience regarding the

electronic participation in corporate bodies and to study

it in a comparative context.

3. METHODOLOGY

Our main research goal, therefore, is to study the

regulation of electronic participation in meetings of

shareholders and other corporate bodies in Lithuania in

a comparative context and to suggest improvements.

Among other things, this article analyses how the

November 2022 changes were implemented by companies

in Lithuania based on the publicly disclosed information.

For a broader picture of how electronic participation was

employed in Lithuania during the pandemic, we address

the ofﬁcial news published by Lithuanian companies

listed on the Nasdaq Stock Exchange30 during the period

between 2020 and 2023. It is noted that the Lithuanian

presence on the stock market is very small – there are

only 16 companies in the main list.

A legal comparison method is used in our research.

Two jurisdictions were selected to study how corporate

governance regulations were digitised therein and to ﬁnd

any useful insights for Lithuania: Estonia and Germany.

Estonia was chosen as it is a country that has

been at the verge of digitalisation and one of the

pioneer jurisdictions that has embraced eGovernment

initiatives.31 As Teichmann observed, Estonia has

consistently committed itself to digitalisation in the

recent years.32 For years Estonia has offered legal text and

incorporation forms in English.33 Its unique e-residency

program allowed foreign nationals to acquire the status

of e-resident from an Estonian embassy to be able to use

the country’s electronic administrative procedures.34 In

addition, it is a jurisdiction belonging to the continental

European family, similarly to Lithuania, and modelled on

German law.35

It would also be practical to look at German law as it

often serves as the origin and the source of inspiration

for other countries of the European continental family,

including Estonia. Additionally and similar to Lithuania,

Germany has also recently (in 2022) enacted new

changes for the introduction of virtual general meetings

of shareholders in public companies.36 The latter changes

have already been thoroughly discussed in academic

circles in Germany,37 and the results of this discussion

are helpful in our comparative analysis and in suggesting

any recommendations for Lithuania. Finally, all three

countries in focus (Estonia, Germany, and Lithuania)

are EU Member States with positive experiences of

implementing EU directives.

To better understand the issues of corporate

governance that companies have faced in Lithuania, we

also carried out two anonymous surveys by using the

Google Forms platform among representatives of large,

middle-sized and small law ﬁrms in Lithuania. The ﬁrst

survey was carried out in February–March 2022.38 We

selected law ﬁrms from the list of ﬁrms provided by The

Legal 500 in the jurisdiction’s overview.39 The following

law ﬁrms were approached: CEE Attorneys, Ellex,

Sorainen, WALLESS, ILaw/Lentax, Motieka&Audzevičius,

SPS LEGAL, Glimstedt, Triniti Jurex, COBALT, Deloitte

Legal, PWC Legal, TGS Baltic, Eversheds Saladzius, and

Sulija & Partners. We carried out the ﬁrst survey in

February–March 2022. Overall, we approached 15 law

ﬁrms and 25 company registration agencies, and we

received 13 answers, all from law ﬁrms (4 large law ﬁrms

and 9 small or medium-sized law ﬁrms). The company

4Romashchenko and Bitė Utrecht Journal of International and European Law DOI: 10.5334/ujiel.615

registration agencies did not provide any answers to the

survey. This survey touched upon the online formation of

companies and corporate governance in Lithuania. The

results of the survey have already been reﬂected in our

earlier publication.40

The second survey was launched to understand

whether artiﬁcial intelligence, algorithms and platforms

were used in corporate governance in Lithuania and

what the opinions of lawyers were regarding the law

adopted in November 2022.41 The ﬁrst part of the second

survey (artiﬁcial intelligence/algorithms/platforms) goes

beyond the scope of the present article. For this article

we only analysed the part of the survey containing

feedback regarding the November 2022 amendments.

For the second survey, 18 law ﬁrms were approached

in February–March and June 2023: the same law

ﬁrms as before,42 and also Citco Vilnius, MZ-Legal, and

Bartkus&Partners. All the mentioned law ﬁrms have been

known for providing services in commercial law, company

law, corporate governance, and ﬁnance. We received 15

responses (6 large law ﬁrms, 8 small or medium-sized law

ﬁrms and 1 individual law practitioner). For both surveys

law ﬁrms were contacted with questions regarding both

private and public companies, and some questions were

formulated even more generally – regarding legal entities.

4. THE DEVELOPMENT OF ELECTRONIC

PARTICIPATION IN THE LAWS OF

ESTONIA, GERMANY, AND LITHUANIA

4.1. IMPLEMENTATION OF ELECTRONIC

PARTICIPATION FOLLOWING THE SRD I

Rules regarding the electronic participation of

shareholders in general meetings were implemented in

Lithuania long before the COVID-19 pandemic. At the

time of adoption of the Lithuanian Law on Companies

(2000),43 electronic participation in corporate bodies

was not a widespread phenomenon. In 2009, a law

providing for major statutory changes in the use of

technologies in Lithuanian companies was adopted.44

These amendments allowed the transmission of a voting

ballot for a general meeting of shareholders by means of

electronic communication, under the condition that the

security of transmitted information was ensured and the

identity of shareholders was determined.45 By the same

Act, participation in general meetings of shareholders

by electronic means was allowed – it became the right

of a company to make such participation and voting

possible.46 According to the law, in case a company

stipulated any requirements and restrictions for

electronic participation, they should be introduced to the

extent that they are necessary to ensure the security of

transmitted information and to determine the identity

of shareholders, and only in a manner proportionate

to achieving the declared goals.47 These changes were

aimed at implementing the provisions of Shareholder

Rights Directive I (hereinafter SRD I).48 It is the Directive’s

premise that the constraints introduced by Member

States should exist as far as they are necessary for the

veriﬁcation of identity and the security of electronic

communications, as well as being proportionate to

achieve the objectives.49 The 2009 amendments went

even further than the Directive requires, as electronic

participation was allowed in all types of companies – not

limited to listed ones.

The latter changes were not very speciﬁc as to which

corporate body could decide to allow participation in

general meetings of shareholders by electronic means: a

general meeting of shareholders, a supervisory board, a

management board, or a manager (CEO) of a company.50

It was only prescribed that in case a company wished to

use the opportunity to organise a meeting digitally, the

procedure of voting by electronic communication had

to be speciﬁed in the convocation notice.51 Considering

that the function of convening a general meeting of

shareholders was entrusted to the management board,

or with the manager of the company if the management

board was not formed,52 there were grounds to say that

the convening body would prepare a convocation notice.

However, it was not made sufﬁciently obvious that the

convening body, i.e., the management board (or CEO),

had to decide on electronic participation, and it followed

that corporate directors alone were able to decide on

the issue, unless the articles of association provided

otherwise.53

The 2009 law allowed electronic voting not only for

shareholders, but also for members of a supervisory

board54 and for members of a management board,55

subject to the same conditions. For this, the company’s

decision was not required. The latter digital innovations

in the functioning of a supervisory board and a

management board are not speciﬁed in SRD I, but in

general they are in line with the enabling approach of

this instrument.

Estonia has been at the forefront of digital

transformations in corporate governance.56 Similar

to Lithuania, it implemented the provisions of SRD I

regarding the possibility of electronic participation in

shareholders’ general meetings of listed companies

in 2009.57 Compared to the Lithuanian approach, in

Estonia the method of regulation appears to have been

more detailed. According to the 2009 Act, the articles

of association could provide for electronic participation

in general meetings of shareholders in listed companies

in Estonia in one of the following ways: the ﬁrst option

is participation in a general meeting by means of real-

time, two-way communication throughout the general

meeting, or in another similar electronic way. Under

this option, the shareholder should be able to watch

the general meeting from a remote location, to vote

using electronic means throughout the general meeting

5Romashchenko and Bitė Utrecht Journal of International and European Law DOI: 10.5334/ujiel.615

on each resolution draft and to address the general

meeting at the time determined by the chair of the

meeting. The second option is electronic voting.58 This

option was available not only to listed companies, but

also to other private and public companies. It meant

that shareholders could vote on the items included in

the agenda of the general meeting using electronic

means prior or during the general meeting if this was

technically secure.59 As opposed to the virtual or hybrid

meeting, under this mechanism voting could take place

before the meeting. Thus, it was comparable to the

submission of a general ballot in Lithuanian company

law. Under this scenario, the general meeting of

shareholders could also be transmitted in full or in part

in real time via the Internet so that shareholders could

watch it without participating. Overall, all three options

of participation via electronic means as provided by SRD

I60 were, in a certain way, stipulated in the Commercial

Code of Estonia in 2009.

An important difference between the regulation

in Estonia and in Lithuania was the area where the

company had to stipulate the mechanism of electronic

participation in general meetings. As opposed to the

regulation in Lithuania, the 2009 Estonian Act indicated

that the articles of association of a company could

provide for electronic participation through a virtual

or hybrid meeting in listed companies,61 or through

electronic voting in all types of companies.62 The articles

of association could also describe procedural aspects

of electronic voting or choose to leave this part for the

management board to specify, bearing in mind the

need to ensure the security and reliability of shareholder

identiﬁcation and electronic voting. For public companies

voting by mail, using a special form was also allowed

when the articles of association provided for it.63

Germany also took the path of deeper digitisation

practices in corporate governance in 2009 when the Act

implementing SRD I was adopted.64 Among others, this

Act provided for changes allowing for participation in a

general meeting of shareholders without being physically

present at the location and by exercising voting rights

by electronic means (postal voting), with the possibility

of audio and video transmission of the meeting.65

The electronic participation of shareholders in these

meetings pursuant to these legislative changes was not

unconditional, but required amendments to the articles

of association in the form of a clause allowing electronic

participation or by authorising the management board

to decide on electronic participation. Supervisory and

management boards could also go virtual even before

SRD I was implemented.66 However, to comply with the

duty of care, supervisory boards were recommended to

physically meet at least once a year.67 Therefore, the

physical format in meetings of corporate bodies was still

the preferred one.

4.2. LEGISLATION AS A RESPONSE TO THE

COVID-19 PANDEMIC

The wave of COVID-19 caused changes in the corporate

statutes of numerous countries. However, this did

not happen in Lithuania, where no special rules were

introduced in response to the COVID-19 pandemic.68

In contrast to Lithuania, in 2020 Estonia promulgated

a special Act to expand the use of digital technologies

in corporate decision-making.69 According to the Act,

shareholders might participate in all types of companies

without being physically present at the meeting either by

means of real-time, two-way communication or by other

similar electronic means, allowing them to observe and

speak at the meeting while being distanced and to vote in

the adoption of decisions.70 The same format was allowed

for supervisory board meetings in public companies.

In other words, the Act granted all types of companies

the opportunity to hold meetings of shareholders with

electronic participation. It also permitted meetings

with the electronic participation of supervisory board

members in public companies, unless the constituent

document provided otherwise.71 In addition, in the face

of the pandemic the law allowed simpliﬁed procedures

of voting before the meeting and without convening the

meeting.72 With the latter amendments, the Estonian

regulation became more ﬂexible and approached the

method of regulation used in Lithuania, as it was no

longer necessary to provide for electronic participation in

the articles of association. At the same time, as noted

by scholars, shareholders have faced less predictability

while companies have tended to use the simplest tools

of distance voting, without creating special electronic

environments for these purposes.73 Although the

wording of these changes has an enabling stance (‘a

member of a body of a legal entity may participate in

the body’s meeting and exercise their rights by electronic

means’74), from the decision-making perspective it was

not clearly stated which corporate body in the company

had to decide on the form of the meeting (virtual,

physical or hybrid). Moreover, in the case of a virtual or

hybrid meeting, the exact electronic means to be used

were not speciﬁed. More ﬂexibility in regulation gives

wide leeway for the management board to decide on the

exact electronic means to be used for the purposes of

electronic participation, unless the articles of association

preclude these speciﬁc electronic means from being

chosen.75 Essentially, the Estonian legislator chose an

opt-out approach in regulating the format of electronic

participation. In the absence of any speciﬁc regulations

in the articles of association, it is for the management

board to decide how exactly the electronic means might

be used at the general meeting of shareholders.

Germany belongs to the group of jurisdictions which,

along with Estonia, introduced special measures as a

response to the COVID-19 pandemic76 in the form of a

6Romashchenko and Bitė Utrecht Journal of International and European Law DOI: 10.5334/ujiel.615

special Act.77 Unlike the legislation in Estonia, this Act

had a temporary effect for general meetings in private

and public companies – until 31 August 2020.78 The

main focus of the changes was on the general meeting

of shareholders as the central organ of corporate

decision-making.79 For public companies, the regulation

allowed electronic participation in general meetings

of shareholders and in meetings of supervisory boards

without the need for a special clause in the articles of

association.80 Similarly, for private companies, resolutions

of shareholders were allowed to be made in writing

without the prior consent of shareholders.81 It should

be mentioned that the regulation was not changed

considerably for private companies in Germany, because

even before the pandemic private companies enjoyed

more freedom and could introduce videoconferences or

other hybrid forms in their articles of association.82

While the latter change was the only one for private

companies, for public companies these amendments

were more extensive and sophisticated. Four conditions

were foreseen in order to hold a virtual general meeting

of shareholders: video and audio transmission of the

entire meeting; shareholders should be provided with the

right to exercise voting rights via electronic participation;

shareholders should be provided with the right to ask

questions; and shareholders should be provided with the

right to object to resolutions in case they have already

exercised their voting rights on that matter. Additionally,

both the management board and the supervisory board

had to approve the virtual mode of the meeting.83

Despite the outlined requirements, a great number

of German public companies held virtual meetings in

2020.84 Although these novelties were regarded as a

short-term solution to the COVID-19 crisis,85 the technical

side of the implementation of this law was viewed as

successful from the start.86 Thus, commentators saw the

future of electronic participation in general meetings of

shareholders as having potential – especially the hybrid

format meeting87 – but encouraged companies to create

the necessary conditions for the exchange of views,

questions and answers among shareholders.88

In the second half of 2020, German legislators

extended the effect of GesRuaCOVBekG until

31 December 2021.89 These statutory moves were

predictable considering the epidemiological situation,

but there was also an understanding that the German

Stock Corporation Act needed a slightly more permanent

modiﬁcation instead of a temporary solution.90 However,

before a permanent change was to happen, German

legislators extended the effect of the regulations for the

second time91 so that the public began to prepare for

another year (2022) of virtual meetings of shareholders.92

In July 2022, the German Parliament adopted the

expected changes to introduce virtual general meetings

in public companies on a permanent basis.93 As a result

of these amendments, two brand new articles were

added to the Stock Corporation Act (Art. 118a ‘Virtual

general meetings’ and Art. 130a ‘Right to speak and

comment at virtual general meetings’), and some

amendments were made to other articles.94 In addition,

the new act extended its effect to other business forms

of legal entities, namely partnerships limited by shares

(KGaA) under Art. 278(3) of the AktG.95 Compared to the

previous temporary law, which was designed to regulate

general meetings of shareholders during the COVID-19

pandemic, this Act speciﬁed a longer list of requirements

to be fulﬁlled for organising a virtual general meeting.

Similar to the previous regulation, the conditions for

having virtual meetings include: full video and audio

transmission of the meeting; the exercise of shareholders’

voting rights by means of electronic communication; and

the opportunity to object to resolutions of the general

meeting. New conditions and requirements include: the

requirement to provide shareholders with the right to

submit motions and nominations for election via video

communication; the electronic right to information; the

availability of the management board’s report if the

management decides that shareholders’ questions must

be asked before the meeting; the possibility to speak

at the meeting; and the electronic right to comments.

Therefore, compared to the previous COVID-19

legislation, the new Act contains more guarantees for

the exercise of shareholders’ rights, particularly at the

meeting. Conversely, during the pandemic, shareholders

in Germany in most cases had to passively listen to the

audio and video broadcast of the meeting.96 Yet, as far as

the grounds for avoidance of the resolutions adopted by

the general meeting are concerned, the law has deterred

shareholders from instituting proceedings based on

violations caused by technical disruptions.97 An action

based on the violation caused by technical disruption

can be brought only in cases where the company acted

with gross negligence or intentionally.98 For these cases

companies would bear the secondary burden of proof

so that they would be required to at least explain the

circumstances within their area of competence and

provide internal information that shareholders would not

be able to collect.99

The principal difference between the temporary

COVID-19 legislation and the new Act is the return to

the pre-pandemic rules, where the articles of association

should provide for or authorise the management board

to provide for a virtual general meeting.100 Only for the

transitional period until 31 August 2023 was it permitted

to hold virtual general meetings without explicit indication

in the articles of association, subject to the decision of

the management board, approved by the supervisory

board.101 As for hybrid meetings, it is also for the articles

of association to provide for electronic participation in the

general meeting or authorise the management board to

7Romashchenko and Bitė Utrecht Journal of International and European Law DOI: 10.5334/ujiel.615

provide that shareholders can participate without being

present at the location and can exercise their rights by

means of electronic communication.102

This Act on the introduction of virtual meetings

was the result of positive experience of virtual general

meetings in 2020 and 2021.103 Easier shareholder

participation and improved informing of shareholders

were outlined among the main beneﬁts of virtual general

meetings in Germany.104 By empowering shareholders,

the legislator made the virtual meeting format closer

to the in-person format of general meetings.105 Still,

by some characteristics this type of meeting has its

unique features. As opposed to face-to-face meetings,

some online format restrictions exist only in virtual

meetings. For instance, in virtual meetings, for technical

reasons only one person can speak at a time, and in

these meetings speciﬁcally, technical issues can cause

substantial problems.106 In addition to some inherent

concerns in virtual meetings, some criticism was voiced

towards the Act for not being a fundamental reform as

called for by practitioners and academics, and for not

dealing comprehensively with the threat of predatory

shareholders.107 For instance, the new Act provided

shareholders with a mechanism in which to ask questions

three days before the general meeting and then to

ask supplementary questions directly at the meeting

based on the answers of the management board. This

mechanism was heavily criticised for carrying the risk

that the answers of the management board would be

instrumentalised to prepare many new inquiries.108 The

latter extensive right to ask questions was viewed as

unattractive for both shareholders and companies that

might be forced to return to the face-to-face mode of

general meetings.109 Nevertheless, these critical remarks

were viewed as merely suggestions for improvement:

overall, the new Act was praised for moving in the right

direction. 110

4.3. POST-COVID-19 CHANGES IN LITHUANIAN

COMPANY LAW

The latest amendments to the Lithuanian Law on

Companies (hereinafter LoC) regarding the use of digital

technologies in corporate governance took place in

2022.111 These changes were not connected to the

implementation of any EU law sources and covered

several areas of corporate governance, including broader

digitalisation rights. One of their key provisions is that

shareholders owning together or separately 10 or more

percent of share capital (if the articles of association

do not provide for a lower limit) have the right to

decide on the possibility of participating online in the

general meeting.112 Before these amendments, only the

company could decide on the format of the meeting. It

is still within the competence of the management board

to determine the speciﬁc procedure of participation and

voting using electronic means,113 even where it is the

shareholders who initiated the convening of the meeting.

The 2022 changes also allowed for the stipulation

in the articles of association that general meetings are

exclusively held electronically if all shareholders agree

to it.114 More detailed rules about the veriﬁcation of

shareholders’ identities were also added. Generally, in

public companies (ABs), the identity of shareholders

has to be veriﬁed before the meeting and prior to each

question, except for meetings where shareholders

participate electronically, or where participation is in

writing or by ﬁlling out a general ballot.115 In the case of

private companies (UABs), this issue is left to companies’

self-regulation. Additionally, the amending Act allowed

for the formation of the minutes of these meetings and

the general ballot electronically, using qualiﬁed electronic

signatures.116

The main idea of these changes was to create more

favourable business conditions by removing the existing

obstacles in the regulatory environment. Legislators

encouraged the use of electronic means in general

meetings of shareholders for the latter to become a

simpler, smoother and cheaper process.117 Although

physical meetings were inserted in the law as the default

option, shareholders were provided with the autonomy

to turn to a hybrid or virtual format for their participation

in these meetings, beyond the discretion of corporate

directors.118 However, despite the advantages of electronic

participation in general meetings of shareholders, ABs

in Lithuania did not use this tool for convening ordinary

meetings in the ﬁrst half of 2023.119 Taking into account

that companies in Lithuania have the obligation to

hold an annual meeting of shareholders no later than

four months after the end of the ﬁnancial year,120 in

2023 there were no annual meetings of shareholders

of listed companies where shareholders participated

electronically. Moreover, electronic participation was

rarely used in previous years (2020–2023): due to the

COVID-19 pandemic, shareholders were often urged

to use another tool for distant voting in advance – the

general ballot.121 Snaigė AB is a rare example of a listed

company that allowed the participation of shareholders

by electronic means in a meeting in February 2021.122

This was an unexpected ﬁnding because in terms of

protection of minority shareholders’ rights electronic

participation offers more opportunities for shareholders.

Through electronic participation shareholders may

exercise their right to information by asking questions

and commenting in real time, and participation costs

are also saved. Therefore, it is safe to assume that the

future promises more widespread use of the electronic

participation in Lithuanian companies.

The reasons for the scarce use of electronic

participation in general meetings of listed companies

in 2020–2023 could lie in the absence of ‘efﬁcient and

reliable electronic solutions’, as one company noted.123

Another consideration for the rare use of electronic

participation might be that voting by general ballot

results in broader ﬂexibility as ballot voting is less time-

8Romashchenko and Bitė Utrecht Journal of International and European Law DOI: 10.5334/ujiel.615

consuming than the electronic participation. In the next

chapters we look for issues in the regulation of electronic

participation in corporate bodies of companies in

Lithuania based on a comparative overview of the other

jurisdictions in focus and the results of a survey carried

out among law ﬁrms in Lithuania.

5. EVALUATING THE ELECTRONIC

PARTICIPATION IN CORPORATE

BODIES IN LITHUANIA

In this chapter we discuss the process and results of the

digitalisation of corporate governance in Lithuania by

looking at the results of online surveys and comparing

the achievements in corporate governance digitalisation

in Lithuania with those of the other jurisdictions. As

mentioned, two surveys were carried out among

representatives of law ﬁrms in Lithuania. The results of

these online surveys are presented and discussed from

a comparative perspective to suggest recommendations

for the improvement of company law in Lithuania.

5.1. THE SURVEY OF FEBRUARY–MARCH 2022,

AND ITS DISCUSSION

It should primarily be emphasised that our ﬁrst survey

took place in February–March 2022, meaning that

the results of our survey do not reﬂect the opinions of

surveyed lawyers regarding the effect and consequences

of the changes adopted in Lithuania in November 2022.124

According to the results of this survey, 9 respondents out

of 13 stated that they organised (consulted on) meetings

of corporate bodies online, while 4 out of 13 answered

negatively. Among those 9 respondents who organised

(consulted on) meetings of corporate bodies online, 5

indicated that they experienced issues when organising

(consulting on) those meetings, while 4 reported no

issues.

When those 5 respondents who reported issues in

organising online meetings of corporate bodies were

asked about the essence of their issues, different

answers were given. One respondent mentioned that the

procedure was not precisely described by the law and

there were discussions on how such meetings should

be duly formalised and organised. Another respondent

complained about the difﬁculty of ensuring a safe

vote, collecting the signatures of the participants, and

achieving the approval of notaries on the decisions of a

remotely organised meeting. The problem of collecting

signatures among participants was mentioned a few

more times, namely in the context of documents

e-signed by foreigners.

To overcome the existing issues, the respondents who

reported them suggested that the procedure and the

requirements of online meetings need to be described

more precisely in the law and that foreign e-signatures

should be recognised. As for the remark about foreign

e-signatures, this shortcoming has already been dealt

with by the State Enterprise Centre of Registers of the

Republic of Lithuania, as we have established in our

previous article.125

Additionally, the 13 respondents expressed their

opinions on whether they found the regulation of

organising meetings of corporate bodies online to be

sufﬁcient: 4 respondents answered ‘Not applicable/No

opinion’; 2 respondents found it absolutely sufﬁcient;

4 fairly sufﬁcient; 2 absolutely insufﬁcient; and 1 fairly

insufﬁcient. Therefore, 6 respondents out of 13 found

the regulation sufﬁcient. Respondents whose answer

was not ‘Absolutely sufﬁcient’ were asked how the legal

regulation of online corporate governance could be

improved. In reply to this question, the respondents noted

that online meetings could be more precisely regulated

and better scrutinised by describing which tools can be

used, how the participants should be identiﬁed and how

the adopted decisions need to be formalised.

The 13 respondents were also asked whether

they found the processes of organising meetings in

corporate bodies online effective: 2 respondents chose

the option ‘Not applicable/No opinion’; 4 found the

regulation absolutely effective; 5 fairly effective; and 1

fairly ineffective. So, in general, most respondents were

satisﬁed with the regulation, viewing it as effective (9

respondents out of 13). Respondents who did not ﬁnd

the regulation absolutely effective opined that clear rules

on ﬁlming, recording and online tools should be in place

to improve it, while others just reiterated their previous

comments.

The remarks of respondents about the effectiveness

and sufﬁciency of the regulation of online corporate

meetings need some evaluation in the context of the

November 2022 changes to the LoC, which was in focus

of our second survey. Therefore, it is worth considering

whether the latter law has already improved the situation

and whether the mentioned comments are still relevant.

We focus on the November 2022 changes to the LoC in

the second section of this chapter.

5.2. THE SURVEY OF FEBRUARY–MARCH AND

JUNE 2023, AND ITS DISCUSSION

The second survey touched upon the November 2022

amendments to the LoC in Lithuania.126 The key novelty

of the November 2022 changes was the introduction

of the right of shareholders to decide on the use of

electronic means for the purposes of participation in the

general meeting.127 Before the amendments came into

force, it was in the competence of the management

bodies to decide on this matter. In addition, it was

permitted to provide in the articles of association that

all general meetings are held electronically128 and to

form the minutes of meetings and the general ballot

using qualiﬁed electronic signatures.129 Also, in case

9Romashchenko and Bitė Utrecht Journal of International and European Law DOI: 10.5334/ujiel.615

of the online participation of some shareholders, the

identity of shareholders would have to be veriﬁed before

the meeting and prior to each question, but this rule

would not apply in case shareholders were to participate

electronically.130

Compared to the ﬁrst survey, where there were 13

respondents, the second survey had 15 respondents. In

reply to the statement that the recent (as of November

2022) changes to the Lithuanian LoC on electronic

participation in general meetings of shareholders had

improved corporate governance, 10 respondents out

of 15 agreed, 2 respondents disagreed, 2 chose the

option ‘Maybe’, and 1 selected the option ‘I don’t know’.

Despite the different reactions regarding the ﬁrst topic,

almost all respondents (14 out of 15) were positive in

assessing whether the recent changes were sufﬁcient:

14 respondents found them fairly sufﬁcient, and only 1

respondent chose ‘Not applicable/No opinion’ regarding

this question.

Finally, respondents were asked whether they

found the recent changes to the Lithuanian LoC on

electronic participation in general meetings effective: 13

respondents out of 15 saw them as fairly effective, while

2 respondents assessed them as fairly ineffective.

One of these 2 dissenting respondents noted that

electronic participation in general meetings was possible

even before the latest amendments. This respondent

also claimed that electronic general meetings were not

popular due to the additional burden on companies (a

1.5–2-fold increase in work) and since there were not

many companies where the participation of shareholders

was necessary. In the opinion of this respondent, a good

solution could be to establish that electronic general

meetings are mandatory for companies with a certain

number of shareholders – e.g. listed companies. This

suggestion seems interesting to consider, as such

changes would most deﬁnitely make electronic meetings

more popular and would effectively increase the number

of meetings in this format. However, the introduction

of this approach might seem rather frustrating for

companies, especially for those used to face-to-face

meetings. In addition, despite the advantages of virtual

and hybrid meetings, the grounds for this move seem

lacking. That is why it is not recommended to embrace

this approach entirely.

Another respondent opined that there should be

no amendments because the law should be neutral

regarding the form of activities (digital/non-digital)

at the corporate level (shareholders’ meetings, board

meetings, etc.). This view is also interesting to consider,

but it contrasts with the fact that in the EU and in many

national statutes electronic participation in general

meetings has been regulated. That is why, although it

might be tempting, it has so far not been very realistic to

produce legislation which would universally regulate all

forms of meetings of corporate bodies.

There were also several other comments from

the respondents. It seems that the procedure of

implementation of the changes might take some time,

as one respondent opined that the effect of the law in

practice had not yet been seen because many clients had

not yet amended their articles of association to enable

the electronic participation of shareholders. Another

respondent noted that the law allowed shareholders’

meetings to be more easily organised but did not fully

protect shareholders’ options if the company had imposed

measures that were too strict or inconvenient. One more

respondent noted that these changes gave more clarity

and ﬂexibility regarding electronic participation in general

meetings, allowing innovative companies to completely

withdraw from physical meetings ever being organised.

Finally, one respondent suggested that the law

should state the procedure of identiﬁcation. It is worth

saying that some procedural aspects have indeed

already been covered by the Act, for example, how the

minutes of meetings should be formalised with new,

more precise rules on the veriﬁcation and identiﬁcation of

shareholders. Still, although a large part of these changes

dealt with procedural aspects, many of them in essence

were substantial rather than procedural. The approval

of the procedure for the voting of shareholders during

the meeting has largely been left to the competence

of the management board.131 Further indirect evidence

of the need for more regulatory focus on procedure in

electronic general meetings is the absence of annual

general meetings where electronic tools were used in

listed companies in Lithuania in 2023.132 Naturally, the

statistics of general meetings in listed companies do not

show the whole picture, as non-listed public companies

and private companies might tend to employ electronic

means in general meetings or hold virtual meetings. In

addition, excessively detailed regulation would perhaps

hinder the ﬂexibility of relations.

Nevertheless, it appears that there are grounds to

ﬁnd the above comment relevant for the consideration

of future changes in the LoC. Lithuanian companies

and their shareholders would only beneﬁt if there was

a more uniﬁed understanding of how participants of

general meetings might exercise their corporate rights in

the electronic format. The laws of Estonia and Germany

might be used to provide some ideas and solutions on

this matter.

As has been seen, the regulation in Estonia is not

far more detailed than in Lithuania. After the 2020

COVID-19 amendments, all shareholders were entitled

to participate remotely in general meetings by means of

real-time, two-way communication or by other similar

electronic means, allowing them to observe and speak

at the meeting while being away and to vote on the

adoption of decisions.133 Although this concise statutory

clause does not offer many details, it makes a crucial

point: that shareholders should be able to observe and

10Romashchenko and Bitė Utrecht Journal of International and European Law DOI: 10.5334/ujiel.615

speak at the meeting. In fact, this issue has occupied the

minds of scholars: How can we ensure that shareholders

are able to exercise their rights to comment, speak,

ask questions and object using electronic means?134

It would be a step in the right direction to foresee that

shareholders in virtual and hybrid meetings should be

able to express and exchange views in real time.

To ensure the exchange of views during virtual

meetings, the recent amendments to the German

corporate law have provided for some requirements,

including detailed provisions on how shareholders can

exercise their right to information and to comment at

the meeting.135 Despite some criticism of the new law

in German theory and practice, as has been discussed

above, there is nonetheless consensus about the need to

give shareholders the right to speak and to ask questions

in virtual meetings. It is a basic premise that any

shareholder can exercise the right to participate in the

meeting regardless of the amount of the shareholding.136

The right to information and the right to speak can be

restricted only if its excessive use jeopardises the course

of the meeting.137 German law has allowed shareholders

to ask questions in advance by sending them to the

management board prior to the meeting, as well as to

ask supplementary questions and questions regarding

new matters raised directly at the meeting. Due to the

risk of abuse of this right by predatory shareholders,

said mechanism might be borrowed partially, so that

shareholders are entitled to ask questions during the

meeting only if they touch upon obstacles that arose

during the meeting and that could not have been known

before the meeting. Otherwise, questions should be

asked prior to the meeting – Lithuanian law already

knows this mechanism.138

Solutions to improve the procedure of the identiﬁcation

and voting of shareholders in case of electronic

participation might be sought not only in the laws of other

countries, but also in positive examples demonstrated by

some businesses. One such example in Lithuania was

the extraordinary general meeting of the shareholders of

Snaigė AB, held on 11 February 2021, where shareholders

could participate by electronic means. The procedure of

participation was rather precisely described in the annex

to the convocation notice.139 All shareholders willing to

participate electronically ﬁrst had to notify the company

in advance about their willingness to do so and had to

send a copy of their personal identity document. These

shareholders were sent the following information: a link

to join the procedure for registration and identiﬁcation of

shareholders; a link to the meeting; and an identiﬁcation

password. Shareholders had to join the procedure for

registration and identiﬁcation, where they were identiﬁed

through video camera: they had to show their personal

identity document and to recite the password.140 The

person registering meeting participants checked whether

the data provided by shareholders and the password

coincided with the information owned by the company.

In case of successful registration, the shareholders

could join the meeting. After joining the meeting, all

shareholders were allowed to speak – shareholders with

the largest number of shares were the ﬁrst to exercise

this right. To vote, shareholders had to say their name

and express their will: for or against a certain item in the

agenda. The instructions also touched upon technical

requirements, troubleshooting, collections of personal

data, and the language of the document.

This example of the use of electronic means in

a general meeting might not be without its ﬂaws:

identiﬁcation by document and password could not

fully prevent another person with similar appearance

and in possession of the required information from

registering for the meeting. A general ballot signed by

qualiﬁed electronic signature would be more reliable as

an identiﬁcation tool because it would give trustworthy

information that the signature belonged to the

shareholder. Therefore, an identiﬁcation procedure by

video camera whereby a person shows an identiﬁcation

document and recites a password might be practical

to identify a person for the purpose of the exercise of

other shareholders’ rights, namely the right to comment

and to ask questions, while for the exercise of the right

to vote it would still be preferable to use electronically

signed general ballots. Therefore, it appears most

secure for the purpose of voting to have an electronic

environment used by the company in case of virtual or

hybrid meetings which could enable shareholders to

upload general ballots signed by qualiﬁed electronic

signatures in real time.

Considering the above-mentioned, the Lithuanian

LoC might be supplemented with provisions clarifying

the identiﬁcation procedure in case of remote electronic

participation. It might be added that shareholders

identiﬁed through real-time, two-way video and audio

connection (e.g. by presenting their identiﬁcation

document, reciting a password, etc.) can participate in

the meeting by exercising their rights to comment and to

ask questions, unless otherwise provided by the articles

of association or the decision of the management

board (or by the manager in case of the absence of the

management board). However, the registration and

identiﬁcation of shareholders for the purpose of voting

need more reliable solutions. Therefore, shareholders

identiﬁed by audio and video connection should not

generally be allowed to vote unless the articles of

association or the decisions of the management board

(or by the manager in case of the absence of the

management board) provide otherwise.

5.3. OTHER COMMENTS IN A COMPARATIVE

CONTEXT

Although there were no comments from respondents

about the source of regulation for virtual and hybrid

11Romashchenko and Bitė Utrecht Journal of International and European Law DOI: 10.5334/ujiel.615

meetings of shareholders, it would beneﬁt clarity and

certainty if the law identiﬁed the legal basis for the

electronic participation of shareholders in a general

meeting. For instance, according to the German law

on the introduction of virtual general meetings, the

articles of association should provide for or authorise

the management board to provide for a virtual

general meeting.141 Estonia does not possess the

same type of regulation: shareholders are entitled to

participate in general meetings using electronic means

of communication unless the articles of association

provide otherwise.142 This essentially means that the

management board in Estonian companies is free to

choose the exact electronic means of communication

to be used for the general meeting if the articles of

association give no hint on this matter.143 The law on

private companies in Germany is also rather abstract

regarding the exact body to decide on the electronic

participation of shareholders in general meetings.

These gaps in regulation are expected to be ﬁlled with

respective clauses in the articles of association.

It is interesting to elaborate, using the example of

German law on public companies, what does it mean

for a virtual meeting of shareholders if the legislation

requires that the articles of association provide for or

authorise the management board to provide for a virtual

meeting of shareholders. A provision in the articles of

association granting virtual meetings or authorising

the management board to provide for a virtual meeting

has to be limited in time – maximum ﬁve years.144

Under this approach the default format of a general

meeting is face-to-face. For the change in the articles

of association it would be required that a qualiﬁed

majority of shareholders (at least three quarters of

the share capital)145 approved the amendments to

the articles of association. In other words, without

controlling shareholders (if there are any) it would

not be possible to change the articles of association,

meaning that minority shareholders would not be able

to participate electronically without prior approval from

the majority. On the other hand, in case the articles

of association provide for virtual meetings, it would

mean that for the maximum ﬁve years146 all general

meetings of shareholders should be virtual. However,

there is no guarantee that it would be convenient for

shareholders in the next ﬁve years or so. That is why

it is more recommended in German academia to use

a more ﬂexible and less stringent alternative for public

companies, that is to give the option of authorisation to

the management board.147

In Lithuania, before the November 2022 amendments

the law speciﬁed that ‘the company may provide for

a possibility for shareholders to attend the general

meeting of shareholders and to vote by means of

electronic communications.’148 This regulation was rather

abstract as it was not clear which body had to decide

on the approval of electronic participation in the general

meeting. At present, the rule in the LoC is worded in a

way to provide for inclusive shareholder participation:149

‘the company must provide for a possibility of electronic

participation if shareholders holding at least one tenth

of shares requested it, if the articles of association do

not provide for a lower threshold’.150 This provision is a

step towards shareholder empowerment, but it still lacks

clarity on which corporate body should decide regarding

the use of electronic means. One might argue that

this gap is ﬁlled by another clause, which says that the

company’s management board approves the description

of the procedure for participation and voting in the general

meeting by means of electronic communication.151

Nevertheless, it still remains debatable whether the law

properly protects shareholders with less than one tenth

of share capital.152 Those minority shareholders would be

better protected if the management board was entitled

to allow the use of electronic means in general meetings

at its discretion so that any shareholders, even with less

than one tenth of shares, could ask the management

board to authorise the use of electronic means for the

general meeting. Therefore, to clarify how the rules

on electronic participation of shareholders in general

meetings should be applied and to enable the protection

of all shareholders in a company, it is suggested to

stipulate that the management board (or the manager,

if there is no management board) is entitled to

decide whether shareholders should have the right to

participate in the general meeting electronically, unless

the articles of association require that all meetings are

held electronically or preclude the management from

deciding on the use of electronic means by shareholders

at general meetings. This novelty might co-exist with

the provision enabling minority shareholders owning at

least one tenth of shares to request the use of electronic

means during the general meeting.

6. CONCLUSION

The Lithuanian law has contained rules on the

electronic participation in general meetings since long

before the COVID-19 pandemic. There was no need to

provide for additional regulation during the pandemic,

as opposed to in some other jurisdictions (e.g. Estonia

and Germany). In 2022, based on the experience gained

during the pandemic, Lithuanian legislators adopted

changes to the LoC. These changes have been treated

by practitioners as sufﬁcient and effective: inter alia,

they deal with procedural and substantial aspects of

digitalised corporate governance.

Despite these recent innovative changes to the

Lithuanian law, our study has shown that some

amendments to the LoC would still be welcomed. It would

be instrumental to add more details on the procedure

12Romashchenko and Bitė Utrecht Journal of International and European Law DOI: 10.5334/ujiel.615

of identiﬁcation and veriﬁcation of shareholders during

general meetings in case those are held using electronic

means. It is suggested that the real-time, two-way

video and audio identiﬁcation of shareholders or their

representatives during general meetings might be

employed to allow shareholders to use their rights to

comment and to ask questions at the meeting, unless

otherwise provided by the articles of association or the

management board’s decision. However, shareholders

identiﬁed this way should generally not be allowed to

vote unless the articles of association or the decisions of

the management board (or the manager, in case of the

absence of the management board) provide otherwise.

For voting, it would be more reliable and secure to use the

real-time submission of the general ballot signed with a

qualiﬁed electronic signature through a special electronic

environment. In addition, German experience might be

partly borrowed to organise general meetings in Lithuania

by allowing shareholders participating online to ask

questions directly at the meeting if they touch upon new

matters that could not be known prior to the meeting.

Finally, additional changes to the LoC regarding the

corporate body to decide on electronic participation

would be an advantage. The management board (or

manager/CEO in case of its absence) might be entrusted

with this function unless the articles of association require

that all meetings are held electronically or preclude the

management from deciding on the use of electronic

means by shareholders at general meetings. This right

of the management board might co-exist with the right

of minority shareholders with one tenth of share capital

to request the use of electronic means in the general

meeting.

NOTES

1 Emergency Committee on the COVID-19 pandemic, ‘Statement

on the fifteenth meeting of the IHR (2005), 05.05.2023’

<https://www.who.int/news/item/05-05-2023-statement-on-

the-fifteenth-meeting-of-the-international-health-regulations-

(2005)-emergency-committee-regarding-the-coronavirus-d-

isease-(COVID-19)-pandemic> accessed 12 May 2023.

2 Kristian Csach, ‘Digital Corporate Governance in Slovakia’

(2022) 105 Pravny obzor, special issue 3, 7. There are also

other country-dependent factors making the general meetings

of shareholders held using digital technologies a reliable

instrument. It is so, for instance, in Ukraine, where companies

due to Russian aggression had to switch from the in-person

format of meetings to the safer online format.

3 Ibid, 7; Alexander Walch and Stephanie Häuslmeier, ‘The

“new” virtual general meeting’ [2023] DNotZ 106, 128.

4 Dirk A. Zetzsche and others, ‘Enhancing virtual governance:

comparative lessons from COVID-19 company laws’ (2022) 22

Journal of Corporate Law Studies 115, 149.

5 Kenneth A. Kim and others, ‘Large Shareholders, Board

Independence, and Minority Shareholder Rights: Evidence from

Europe’ (2007) 12 Journal of Corporate Finance 259, 262.

6 Meltem Karatepe Kaya, ‘Impact of the COVID-19 Outbreak

on Minority Shareholder Protection’ (2021) 42 Business Law

Review 67, 69.

7 Elizabeth Boros, ‘Virtual Shareholder Meetings’ (2004) 8 Duke

Law & Technology Review 1, para. 13.

8 The Delaware Code Online, title 8, §§ 211(a)(1)–(2) (2023).

<https://delcode.delaware.gov/title8/c001/sc07/> accessed

9 April 2023. The first to report a fully virtual meeting was

Inforte Corporation in 2001.

9 Lisa Fairfax, ‘Virtual Shareholder Meetings Reconsidered’

[2010] Seton Hall Law Review 1367.

10 Yaron Nili and Megan W. Shaner, ‘Virtual Annual Meetings:

A Path Toward Shareholder Democracy and Stakeholder

Engagement’ (2022) 63 Boston College Law Review 123, 157.

11 Ibid, p. 157–158; Broadridge Financial Solutions Inc., Virtual

Shareholder Meetings 2019 Facts and Figures (2020) <https://

www.broadridge.com/_assets/pdf/broadridge-virtual-

shareholder-meetings-2019-facts-and-figures.pdf> accessed 9

April 2023.

12 Lisa Fontenot, ‘Public Company Virtual-Only Annual Meetings’

(2017) 73 The Business Lawyer 35.

13 Boros (n 7); Elizabeth Boros, ‘Corporate Governance in

Cyberspace: Who Stands to Gain What from the Virtual

Meeting?’ (2003) 3 Journal of Corporate Law Studies 149.

14 Elizabeth Boros, ‘Virtual Shareholder Meetings: Who Decides

How Companies Make Decisions?’ (2004) 28 Melb U L Rev 265.

15 Goran Koevski, Borka Tushevska Gavrilovik and Darko Spasevski,

‘Twenty Years after the First Virtual-Only Annual Shareholders’

Meeting: Can the Virtual-Only Meeting Be a Solution during the

Time of Covid-19?’ (2020) 11 Iustinianus Primus Law Review 1.

16 Lisa Fontenot, Roger Bivans and Jamie Nix, ‘Public Company

Virtual Annual Meetings: The 2020 Watershed and Path

Forward’ (2020) 76 Business Lawyer 927.

17 Ibid, 928.

18 See, e.g. for Germany in 2020: Christopher Danwerth, ‘Die

erste Saison der virtuellen Hauptversammlung börsennotierter

Unternehmen’ [2020] Die Aktiengesellschaft 776; Ulrich

Noack and Dirk Zetzsche, ‘Die virtuelle Hauptversammlung

nach dem COVID-19- Pandemie-Gesetz 2020’ [2020] Die

Aktiengesellschaft 265; Christoph H. Seibt and Christopher

Danwerth, ‘Die Zukunft der virtuellen Hauptversammlung

während und nach der COVID-19- Pandemie – Erkenntnisse der

Hauptversammlungssaison 2020’ [2020] Trends und Ausblick,

NZG 1241.

19 Maris Vutt, ‘Digital Opportunities for – And Legal Impediments

to – Participation in a General Meeting of Shareholders’ (2020)

29 Juridica International 34.

20 Angelo Borselli and Ignacio Farrando Miguel, ‘Corporate Law

Rules in Emergency Times across Europe’ [2020] ECFR 274.

21 See, e.g.: Luca Enriques, ‘Pandemic-Resistant Corporate Law:

How to Help Companies Cope with Existential Threats and

Extreme Uncertainty During the Covid-19 Crisis’ (2020) 17

European company and financial law review 257.

22 See, e.g. for Germany: Klaus J. Hopt, ‘Company Law and the

Corporate Governance Effects of the Pandemic – The new

German Law on Virtual General Meetings of Stock Corporations

and the Effect of the Pandemic on the Board’ [2022] Orizzonti

del Diritto Commerciale 563; Walch and Häuslmeier (n 3); Axel

Hoppe, ‘Die Transposition der virtuellen Hauptversammlung in

die Satzung der AG’ [2023] NZG 587, 592. For Slovakia: Csach

(n 2). For Poland: Marcin Mazgaj, ‘Wirtualne zgromadzenia

w spółkach kapitałowych’ (2022) 14 Annales Universitatis

Paedagogicae Cracoviensis. Studia de Cultura 140.

23 See, e.g.: Piotr Pinior, ‘Impact of the COVID-19 Pandemic on

Company Law. Shareholders’ Meetings and Resolutions’ [2022]

ECFR 100; Maris Vutt, ‘Electronic Voting in Adopting Resolutions

of Limited Companies: the Example of Estonian Law’ (2022)

8 International Comparative Jurisprudence (Online) 91; Dirk

Zetzsche and others (n 4).

24 ICLEG, ‘Report on virtual shareholder meetings and efficient

shareholder communication’ (August 2022).

25 OECD, ‘The Future of Corporate Governance in Capital Markets

Following the COVID-19 Crisis’ (30 June 2021).

26 Amendments to Articles 2, 15, 17, 21, 26, 27, 28, 29, 30,

30-1, 32, 34, 37, 37-2, 40, 42, 45, 47, 47-1, 51, 56 and 78,

annex, and supplementation with Article 46-1 of the Law on

Companies of the Republic of Lithuania – the Act XIV-1540

(17.11.2022).

27 ICLEG (n 24), 3–8, 11, 13; OECD (n 25), 72.

13Romashchenko and Bitė Utrecht Journal of International and European Law DOI: 10.5334/ujiel.615

28 Lina Mikalonienė, ‘The remote participation of shareholders

in the general meetings of private companies as a tool

for more inclusive shareholder engagement’ in Alessio

Bartolacelli and Dovilė Sagatienė (eds), Law and Sustainability –

Perspectives for Lithuania and Beyond (Ksiegarnia Akademicka

Publishing 2023).

29 Virginijus Bitė, ‘Bendrovių reglamentavimo pokyčiai: ar atėjo

startuolių aukso amžius?’ in Lyra Jakulevičienė and Vytautas

Sinkevičius (eds), Lietuvos teisė 2022: esminiai pokyčiai

(Mykolas Romeris University 2022).

30 Nasdaq Baltic <https://nasdaqbaltic.com/> accessed 5 June

2023.

31 European Commission, ‘eGovernment Benchmark 2022

Insight Report, Synchronizing Digital Governments’ (2022) 8

<https://digital-strategy.ec.europa.eu/en/library/egovernment-

benchmark-2022> accessed 12 May 2023.

32 Christoph Teichmann, ‘Die GmbH im europäischenWettbewerb

der Rechtsformen’ [2017] Zeitschrift für Unternehmens- und

Gesellschaftsrecht 543, 578.

33 E-Business Register <https://ariregister.rik.ee/eng> accessed 18

February 2024.

34 E-Residency <https://www.e-resident.gov.ee/> accessed 18

February 2024.

35 Teichmann (n 33), 578.

36 Act on the Introduction of Virtual General Meetings of Stock

Corporations and on the Modification of Cooperatives as

well as Insolvency and Restructuring Regulations, passed

20.07.2022, BGB. I 2022, p. 1166.

37 See, e.g.: Wolfgang Sturm and Jassem Imsameh, ‘Zum Gesetz

zur Einführung virtueller Hauptversammlungen’ [2022] NZG

1327; Hopt (n 22); Walch and Häuslmeier (n 3); Hoppe (n

22); Erik Schirmer, ‘Virtuelle Hauptversammlung: Dreifacher

Ausbesserungsbedarf’ [2023] Die Aktiengesellschaft, 19.

38 Ivan Romashchenko and Virginijus Bitė, ‘Results of the survey

on digitalization of corporate law of Lithuania (carried out

in February-March 2022)’ <http://dx.doi.org/10.13140/

RG.2.2.31374.54081> accessed 25 February 2024.

39 The Legal 500, ‘Legal Market Overview. Coverage by practice

area—Lithuania’ <https://www.legal500.com/c/lithuania/legal-

market-overview/> accessed 28 March 2022.

40 Virginijus Bitė and Ivan Romashchenko, ‘Online Formation

of Companies in Lithuania in a Comparative Context:

Implementation of the Digitalisation Directive and Beyond’

[2023] EBOR 645.

41 Ivan Romashchenko and Virginijus Bitė, ‘Results of the survey

on the use of digital technologies in corporate governance

of Lithuania (carried out in February-March and June 2023)’

<http://dx.doi.org/10.13140/RG.2.2.34729.98400> accessed 25

February 2024.

42 SPS Legal has changed its name (after the merger) and is now

called NOOR.

43 Law on Companies of the Republic of Lithuania – the Act VIII-

1835 (13 July 2000).

44 Amendments to Articles 1, 4, 7, 14, 16, 18, 20, 21, 22, 23,

24, 25, 26, 29, 30, 31, 32, 33, 34, 35, 37, 51, 52, 58, 59, 63,

64, 65, 74, 76, 78, title of chapter seven and annex, and

supplementation with Articles 16-1, 26-1, 26-2, 30-1, 30-2,

30-3 of the Law on Companies of the Republic of Lithuania –

the Act XI-354 (17.07.2009).

45 Ibid, Art. 9 (amended Art. 21(3)).

46 Ibid, Art. 9 (amended Art. 21(4)).

47 Ibid, Art. 9 (amended Art. 21(5)).

48 Directive 2007/36/EC of the European Parliament and of the

Council of 11.07.2007 on the exercise of certain rights of

shareholders in listed companies [2007] OJ L 184, Art. 8.

49 Ibid, recital 9, Art. 8(2).

50 There may be no supervisory board or management board in

a private company (UAB) in Lithuania, leaving all operations to

the manager of a company (CEO). In a public company (AB), in

addition to a CEO, there should be a supervisory board and/or

a management board, i.e., at least one collegial body.

51 Amendments – the Act XI-354 (n 45), Arts. 14 (amended Art.

26(2)), 15 (supplemented Art. 26-1(1)).

52 Law on Companies of the Republic of Lithuania (consolidated

online version), Art. 23(2) <https://e-seimas.lrs.lt/portal/

legalAct/lt/TAD/TAIS.106080/asr> accessed 5 June 2023.

53 Mikalonienė (n 29), 210.

54 Amendments – the Act XI-354 (n 45), Art. 23(3) (amended Art.

32(7)).

55 Ibid, Art. 26 (amended Art. 35(3)).

56 Teichmann (n 33), 578; Maris Vutt, ‘Convening the General

Meeting of Shareholders of a Limited Company: Estonian Law

in a Digital Perspective’ (2020) 1 International Comparative

Jurisprudence 95, 95.

57 The Act on Amending the Commercial Code and Other Laws,

passed 21.10.2009, RT I 2009, 51, 349.

58 Ibid, § 1 (24) (supplemented section 2901 of the Commercial

Code).

59 Ibid, § 1 (12)(43) (supplemented sections 1701, 2981 of the

Commercial Code).

60 Directive 2007/36/EC (n 49), Art. 8(1).

61 Act on Amending the Commercial Code (n 58), § 1 (24)

(supplemented section 2901 of the Commercial Code).

62 Ibid, § 1 (12)(43) (supplemented sections 1701 and 2981 of the

Commercial Code).

63 Ibid, § 1 (43) (supplemented section 2982 of the Commercial

Code).

64 Law Implementing the Shareholder Rights Directive (ARUG),

adopted on 30.07.2009, BGBl. I 2009, p. 2479.

65 Ibid, section 1(7). Art. 118 of the Stock Corporation Act was

changed to this effect.

66 Ulrich Noack, ‘Organisationspflichten und -strukturen kraft

Digitalisierung’ [2019] Zeitschrift für Unternehmens- und

Gesellschaftsrecht 105, 109; Tim Kupfer and Nicolai Nahrgang,

‘Die Regelungen zur virtuellen Aufsichtsratssitzung – ein

unzureichendes Instrumentfür die Praxis?’ [2021] ZIP 678.

67 Gerald Spindler, ‘Digitalization and Corporate Law – A View

from Germany’ [2019] ECFR 106, 120–121.

68 ICLEG (n 3).

69 Act on Amendments to the General Part of the Civil Code and

Other Acts (expansion of electronic possibilities in organizing

meetings and adopting decisions), passed 18.05.2020, RT I,

23.05.2020, 2.

70 Ibid, § 1 (supplemented § 33-1 of the law on the General Part

of the Civil Code), § 6 (amendments to the Commercial Code).

71 Vutt (n 19), 37.

72 Act on Amending the Commercial Code (n 58), § 6

(amendments to the Commercial Code).

73 Vutt (n 23), 101–102.

74 Act on Amendments (n 70), § 1 (amendments to the law on

the general part of the Civil Code).

75 Andres Vutt and Margit Vutt, ‘Adoption of Shareholder

Resolutions in Post-Covid Era. Example of Estonian Law’, in

New Legal Reality: Challenges and Perspectives. II. Collection of

Research Papers (University of Latvia Press 2022), 455.

76 Borselli and Farrando Miguel (n 20), 279.

77 Act on Measures in Companies, Cooperatives, Associations,

Foundations and Condominium Law to Combat the Effects of

the COVID-19 Pandemic of 27.03.2020 (GesRuaCOVBekG). BGBl.

I 2020, p. 569, 570.

78 Ibid, § 7(1)(2).

79 Hans Christoph Grigoleit, Kommentar zum Aktiengesetz (2nd

ed., C.H.BECK 2020), Art. 118, No. 1; Münchener Kommentar

zum Aktiengesetz (4th ed., C.H. Beck 2018), Art. 118, No. 9.

80 Act of 27.03.2020 (GesRuaCOVBekG) (n 78), § 1(1).

81 Ibid, § 2(1).

82 Pinior (n 23), 104.

83 Act of 27.03.2020 (GesRuaCOVBekG) (n 78), § 1(2)(6).

84 Danwerth (n18), 777.

85 Noack and Zetzsche (n 18), 277.

86 Ulrich Noack and Dirk Zetzsche, ‘(Virtuelle) Hauptversammlung

mit und nach Corona’ [2020] Die Aktiengesellschaft 721,

729.

14Romashchenko and Bitė Utrecht Journal of International and European Law DOI: 10.5334/ujiel.615

87 Christoph Teichmann and Hartmut Wicke, ‘Zukunftsmodell

“Hybride Hauptversammlung”’, [2021] Zeitschrift für

Unternehmens-und Gesellschaftsrecht 173, 199.

88 Seibt and Danwerth (n 18), 1251.

89 Ordinance on the Exhaustion of Measures in Company,

Cooperatives, Associations and Foundations Law to

Combat the Effects of COVID-19 Pandemic of 20.10.2020

(GesRGenRCOVMVV). BGB. I 2020, p. 2258; Act to Further

Shorten the Residual Debt Discharge Procedure and to Adapt

Pandemic-Related Regulations in Company, Cooperatives,

Associations and Foundations Law as well as in Tenancy and

Lease Law of 22.12.2020. BGBl. I 2020, p. 3328.

90 Marcus Roth, ‘Neujustierung der deutschen

Unternehmensverfassung nach der COVID-19-Pandemie’ in

Gregor Bachmann, Stefan Grundmann and Anja Mengel/Kaspar

Krolop (eds.), Festschrift für Christine Windbichler zum 70.

Geburtstag am 8. Dezember 2020 (De Gruyter 2021), 980.

91 Act on the Establishment of a Special Fund ‘Aufbauhilfe 2021’

and on the Temporary Suspension of the Obligation to File for

Insolvency due to Heavy Rainfall and Flooding in July 2021 and

on the Amendment of Other Acts (Reconstruction Aid Act 2021

– AufbhG 2021) of 10.09.2021, BGBl. I 2021, p. 4153.

92 Christopher Danwerth, ‘Die virtuelle Hauptversammlung –

Dritter Akt! Letzter Akt?’ [2021] Die Aktiengesellschaft R283,

R284.

93 Act of 20.07.2022 (n 37).

94 Ibid, Art. 2.

95 Uwe Hüffer and Jens Koch, Aktiengesetz (15th ed., 2021), Art.

278, marginal number 17.

96 Sturm and Imsameh (n 38), 1329.

97 German Stock Corporation Act (Aktiengesetz) of 06.09.1965,

BGBl. I p. 1089, last amended by Art. 7 of the Law of

22.02.2023, BGBl. I 2023 p. 51, Art. 243(3), sentence 1.

98 Ibid, Art. 243(3), sentence 2.

99 Diesel Process [2020] BGH v. 25.5.2020 – VI ZR 252/19, BGHZ

225, 316, marginal number 36.

100 Act of 20.07.2022 (n 37), Art. 2(4) (new Art. 118a of the Stock

Corporation Act).

101 Ibid, Art. 3 (change to the Introductory Act to the Stock

Corporation Act).

102 German Stock Corporation Act (Aktiengesetz) (n 98), Art.

118(2).

103 Hopt (n 22), 569. It should be noted that during the pandemic

supervisory boards in German companies also widely met

in the form of video conferences (see: Thomas Kremer

and others, ‘Virtuelle Gremiensitzungen im Rahmen einer

nachhaltigen Unternehmensführung’ [2021] DB 1145).

104 Julian Redeke, ‘Virtuelle Hauptversammlungen börsennotierter

Aktiengesellschaften — “Virtual Insanity”?’ [2022] Die

Aktiengesellschaft 98, 110.

105 Hoppe (n 22), 592.

106 Walch and Häuslmeier (n 3), 128.

107 Hopt (n 22), 576, 578.

108 Ibid, 574.

109 Georg Franzmann and Stefan Rothweiler, ‘Das Auskunfts-

und Rederecht nach dem Gesetz zur dauerhaften Einführung

virtueller Hauptversammlungen von Aktiengesellschaften’

[2022] Die Aktiengesellschaft 809, 820.

110 Schirmer (n 38); Hopt (n 22), 578.

111 Amendments – the Act XIV-1540 (n 27).

112 Ibid, Art. 4(2) (amended Art. 21(4)).

113 Ibid, Art. 12(1) (amended Art. 34(1)).

114 Ibid, Art. 4(2) (amended Art. 21(4)).

115 Ibid, Art. 6(3) (supplemented Art. 27(10)).

116 Ibid, Art. 8(1) (amended Art. 29(3)), Art. 9 (amended Art.

30(4)).

117 Explanatory note to the draft bill amending Articles 2,

15, 17, 21, 27, 28, 29, 30, 30¹, 32, 34, 37, 37², 40, 42,

45, 47, 47¹, 51 and 78, annex, and supplementation

with Article 46-1 of the Law on Companies of the

Republic of Lithuania, Document No. XIVP-1854

(22.07.2022) <https://e-seimas.lrs.lt/portal/legalAct/lt/

TAK/25521d90f24011ecbfe9c72e552dd5bd?jfwid=6i50l5mz5>

Accessed 14 April 2023.

118 Mikalonienė (n 29), 220.

119 This conclusion is based on the notices published on the

Nasdaq Baltic website <https://nasdaqbaltic.com/statistics/en/

news> accessed 11 June 2023.

120 Law on Companies (n 53), Art. 24(1).

121 Annual General Meeting of Shareholders of AB Linas Agro

Group is convened on 29.10.2021. Published: 07.10.2021

15:30:00 CEST <https://view.news.eu.nasdaq.com/view?id=-

b1b7a2ff6485161876c8b5cb582f1398f&lang=en&src=listed>

accessed 20 April 2023; Notice on the Convened Annual Gen-

eral Meeting of Shareholders of AB Klaipėdos nafta. Published:

2023-04-28 15:00:00 CEST <https://view.news.eu.nasdaq.com/

view?id=bee1c62d6db838fbb1be838b02080ce3e&lang=en>

accessed 20 April 2023.

122 Convocation of the Extraordinary General Meeting

of Shareholders of Snaigė AB. Published: 18.01.2021

16:25:36 CET <https://view.news.eu.nasdaq.com/view?id-

=b7b80b8c4eb640218ff60d65fb4a1164e&lang=en&src=listed>

accessed 20 April 2023.

123 Regarding questions that shareholders of AB Klaipėdos nafta

asked in advance. Published: 09.04.2020 07:39:45 CEST

<https://view.news.eu.nasdaq.com/view?id=be7691a082aec6f-

25fdbd88b5805d3fa6&lang=en&src=listed> accessed 20 April

2023.

124 Amendments – the Act XIV-1540 (n 27).

125 Bitė and Romashchenko (n 41), 30.

126 As we have mentioned earlier herein, a part of the second

survey on the use of artificial intelligence, algorithms, and

platforms was not used for this study as it exceeds its

boundaries.

127 Amendments – the Act XIV-1540 (n 27), Art. 4(2) (amended

Art. 21(4)).

128 Ibid.

129 Ibid, Art. 8(1) (amended Art. 29(3)), Art. 9 (amended Art.

30(4)).

130 Ibid, Art. 6(3) (supplemented Art. 27(10)).

131 Amendments – the Act XI-354 (n 45), Art. 12 (amended Art.

34(1)).

132 This conclusion is based on the notices published at the

Nasdaq Baltic website <https://nasdaqbaltic.com/statistics/en/

news> accessed 11 June 2023.

133 Act adopted on 18.05.2020 (n 70), § 1 (supplemented §

331 of the law on the General Part of the Civil Code), § 6

(amendments to the Commercial Code).

134 Hopt (n 22), 572.

135 Act of 20.07.2022 (n 37), Art. 2.

136 Münchener Kommentar zum Aktiengesetz (4th ed., C.H. Beck

2018), Art. 118, marginal number 53 (right to participate),

marginal number 74 (right to speak).

137 Ibid, Art. 118, marginal note 76.

138 Law on Companies (n 53), Art. 16-1.

139 Convocation of the Extraordinary General Meeting

of Shareholders of Snaigė AB. Published: 18.01.2021

16:25:36 CET <https://view.news.eu.nasdaq.com/view?id-

=b7b80b8c4eb640218ff60d65fb4a1164e&lang=en&src=listed>

accessed 20 April 2023.

140 The latter example of video identification of shareholders for

the general meeting is not the only one. When the Latvian

listed company AS HansaMatrix notified its shareholders about

its annual meeting, it was specifically indicated that share-

holders’ video identification would take place on the day of

the meeting. All shareholders were expected to present their

identification documents on camera so that the chair of the

meeting could compare the image of the shareholders with

the image shown in the ID. During the identification, the head,

shoulders, face, and the image with the face on the document

had to be made clearly visible without shading. See: Notifica-

tion on convocation of annual general meeting of sharehold-

ers of AS HansaMatrix on 31.05.2023. Published: 28.04.2023

17:53:41 CEST. <https://view.news.eu.nasdaq.com/view?id-

=bea5eb4e1ef51ab589fd8df8b3db5c704&lang=en&src=

listed> accessed 11 May 2023.

15Romashchenko and Bitė Utrecht Journal of International and European Law DOI: 10.5334/ujiel.615

141 Act of 20.07.2022 (n 37), Art. 2(4) (new Art. 118a of the Stock

Corporation Act).

142 Act on Amendments (n 70), § 1 (amendments to the law on

the general part of the Civil Code).

143 Vutt and Vutt (n 76), 455.

144 German Stock Corporation Act (Aktiengesetz) (n 98), Art. 118(4), (5).

145 Ibid, Art. 179(2).

146 The exact time period can be shorter than five years: for

instance, shareholder protection associations and institutional

shareholders call for two years (see Hoppe (n 22), 588).

147 Hoppe (n 22), 588; Walch and Häuslmeier (n 3), 109.

148 Amendments – the Act XI-354 (n 45), Art. 9 (amended Art. 21(4)).

149 Mikalonienė (n 29), 221.

150 Amendments – the Act XIV-1540 (n 27), Art. 4(2) (amended

Art. 21(4)).

151 Amendments – the Act XI-354 (n 45), Art. 9 (amended Art.

21(4)).

152 Mikalonienė (n 29), 220.

FUNDING INFORMATION

This research is funded by the European Social Fund

under Measure No 09.3.3-LMT-K-712 ‘Development

of Competences of Scientists, Other Researchers and

Students Through Practical Research Activities’.

COMPETING INTERESTS

The authors have no competing interests to declare.

AUTHOR AFFILIATIONS

Ivan Romashchenko orcid.org/0000-0003-1542-2874

Senior Researcher (Law), Legal Technology (LegalTech) Centre,

School of Law, Mykolas Romeris University, LT

Virginijus Bitė orcid.org/0000-0003-3902-0175

Professor (Law), Institute of Private Law, School of Law, Mykolas

Romeris University, LT

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TO CITE THIS ARTICLE:

Ivan Romashchenko and Virginijus Bitė, ‘The Electronic Participation in Corporate Bodies in Lithuania from a Comparative Perspective’

(2024) 39(1) Utrecht Journal of International and European Law pp. 1–16. DOI: https://doi.org/10.5334/ujiel.615

Submitted: 30 June 2023 Accepted: 30 April 2024 Published: 10 May 2024

International License (CC-BY 4.0), which permits unrestricted use, distribution, and reproduction in any medium, provided the original

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Zetzsche Dirk A and others, ‘Enhancing virtual governance:

comparative lessons from COVID-19 company laws’

(2022) 22 Journal of Corporate Law Studies 115. DOI:

https://doi.org/10.1080/14735970.2021.1977453

ResearchGate has not been able to resolve any citations for this publication.

Results of the survey on the use of digital technologies in corporate governance of Lithuania (carried out in February-March and June 2023)

Data

Full-text available

Feb 2024

This survey was carried out in February-March and June 2023 among law firms in Lithuania within the Project “Digitalisation of Company Law: Harmonisation Challenges and Opportunities in Selected Jurisdictions (DigiCol)” (No 01.2.2-LMT-K-718-03-0067). This research was funded by the European Social Fund under the No 09.3.3-LMT-K-712 “Development of Competences of Scientists, other Researchers and Students through Practical Research Activities” measure. The supervisor of the research – Prof. Dr. Virginijus Bitė (School of Law at Mykolas Romeris University). The survey was totally anonymous.

Results of the survey on digitalization of corporate law of Lithuania (carried out in February-March 2022)

Data

Full-text available

Feb 2024

This survey was carried out among law firms in Lithuania in February-March 2022 within the Project “Digitalisation of Company Law: Harmonisation Challenges and Opportunities in Selected Jurisdictions (DigiCol)” (No 01.2.2-LMT-K-718-03-0067). This research was funded by the European Social Fund under the No 09.3.3-LMT-K-712 “Development of Competences of Scientists, other Researchers and Students through Practical Research Activities” measure. The supervisor of the research – Prof. Dr. Virginijus Bitė (School of Law at Mykolas Romeris University). The survey was totally anonymous. Its subject concerned three spheres: online formation of companies, online filing of information/documents, online corporate governance.

Online Formation of Companies in Lithuania in a Comparative Context: Implementation of the Digitalisation Directive and Beyond

Article

Full-text available

Mar 2023

For many years, paper was the main format for the registration of companies. The Digitalisation Directive, adopted in 2019, obliged European Union (EU) Member States to provide founders with the option to form private companies digitally. Although for Lithuania, where online formation of legal entities had already existed even before 2019, these regulatory developments did not bring about radical change, they forced the national legislator to introduce the required amendments. This article aims at studying the provisions of the Digitalisation Directive and the results of its implementation in Lithuania to suggest possible improvements in the online registration of companies. The laws of both EU jurisdictions (Estonia, Latvia, and Poland) and one non-EU jurisdiction (Ukraine) with experience of online registration of companies are investigated in comparison with Lithuanian law. In addition, the results of a survey Among Lithuanian law firms are presented and contribute to the analysis and interpretation of the legislation at hand. The article’s conclusions about the state of implementation of the Digitalisation Directive and the recommended steps beyond the Directive’s transposition provide for further enhancement of statutes and practices in this area.

Virtuelle Hauptversammlung: Dreifacher Ausbesserungsbedarf

Article

Jan 2023

Jan-Erik Schirmer

Das Auskunfts- und Rederecht nach dem Gesetz zur dauerhaften Einführung virtueller Hauptversammlungen von Aktiengesellschaften

Article

Nov 2022

Adoption of Shareholder Resolutions in Post-COVID Era. Example of Estonian Law

Conference Paper

Jan 2022

In 2020, the COVID-19 pandemic forced the world to find the right balance between protecting health, minimizing economic and social disruption and retaining the rights of individuals. States imposed a number of restrictions in order to prevent the spread of the pandemic, including restrictions on the movement of persons and restrictions on gathering. Traditionally, shareholders' meetings of companies have been taken place in the form of physical meetings. Company law also been based on the assumption that meetings are held physically. In the new situation, it was no longer possible to hold meetings in this way, at least for some time. This forced companies to use digital solutions. The legislator was also faced with the question of how to resolve this situation. Different countries reacted differently in order to find company law solutions. In Estonia, new rules were adopted in May 2020 that allowed legal persons to adopt decisions using digital solutions, among other things, it is allowed to make decisions in a full virtual meeting. The central question in the way companies make decisions is whether the use of virtual solutions is possible, but whether the law provides companies with sufficiently flexible options, which would enable decisions to be taken in the light of the specificities and needs of each company and whether such practices ensure the exercise of shareholders' rights. This article analyses whether and how these objectives have been achieved in Estonian law. There are three ways to adopt company’s resolutions in Estonia: a meeting, a written resolution or a vote by letter. Meetings can take place physically, virtually or in a hybrid form. It is not possible to infringe the rights of the shareholder in making a written resolution, since if such a method is used, the resolution decision is adopted only if all shareholders agree. In the case of voting by letter, the law does not take into account the fact that in a shareholder of a public limited company has the right to receive information from directors only at the general meeting. Therefore, the future case-law must lay down the principles of communication between the shareholder and the public limited company in the situation when the resolution has been adopted by using such option. The law stipulates that if digital means are used to hold a meeting, shareholders must be guaranteed all the same rights as they have in the event of a physical meeting. Since these rules have been in force only for a short period of time, there are no court cases based on them. Although the legal literature has been expressed some views on the use of digital solutions, it is not yet known how the courts will resolve these issues if disputes arise.

Impact of the COVID-19 Outbreak on Minority Shareholder Protection

Article

Apr 2021
Bus Law Rev

Meltem Karatepe Kaya

The COVID-19 outbreak, which was announced by the World Health Organization (WHO) as a global outbreak on 11 March 2020, comprises a risk not only for human health, but also for the whole world including society, business and the global economy. During lockdowns caused by the COVID-19 virus, the general atmosphere of companies changed. The significant restrictions and measures announced by the countries in order to deal with the COVID-19 crisis had serious economic outcomes for companies. The crisis environment has been used by some managers, who are also majority shareholders in the company or influenced by majority shareholders, for their own interests to oppress minority shareholders and to remove them from the company and management. Protection of shareholders matters for the facility of companies to raise the capital required to grow, innovate, diversify and compete. Thus, in these difficult COVID-19 times, it is more important to provide protection for minority shareholders. That will develop the level of confidence, trust and finally the levels of investment, which would result in a healthy and robust countries’ economy. Based on that, this article uniquely contributes to minority shareholder protection during the COVID-19 outbreak by focusing on corporate governance and also primary remedies that may be obtained by shareholders during the current pandemic. COVID-19 outbreak, Corporate governance, Minority shareholder protection, Derivative action, Unfair prejudice petition

Zukunftsmodell „Hybride Hauptversammlung“

Article

Jan 2022

Abstrakt Die Corona-Pandemie hat dem Aktienrecht einen unerwarteten Modernisierungsschub verliehen. Der Gesetzgeber schuf in Windeseile eine zeitlich begrenzte rechtliche Grundlage für die rein virtuelle Hauptversammlung. Die Gesellschaften haben diese neue rechtliche und technische Herausforderung gut gemeistert. Das legt die Frage nahe, ob der Gesetzgeber nicht auch für die Zukunft eine rein virtuelle Hauptversammlung in rechtlich abgesicherter Form ermöglichen sollte. Dabei müssen die Rechte der Aktionäre umfassend gewahrt bleiben. Zugleich sollten die Defizite der Hauptversammlungskultur behoben werden, die heute nur noch in Grenzen als Forum der freien Diskussion zwischen Aktionären und Unternehmensleitung angesehen werden kann. Das Beste aus zwei Welten liegt nach der hier entfalteten Konzeption in einer hybriden Versammlung, die eine Präsenzversammlung mit qualifizierten Teilnahmevoraussetzungen und eine elektronische Teilnahme aller übrigen Aktionäre ermöglicht.

Virtuelle Hauptversammlungen börsennotierter Aktiengesellschaften — „Virtual Insanity“?

Article

Feb 2021

Julian Redeke

Digital Opportunities for – and Legal Impediments to – Participation in a General Meeting of Shareholders

Article

Dec 2020

Maris Vutt

In conditions of a globalising economy, the practice of holding a meeting by electronic means of communication to arrange a company’s day-to-day economic activities is increasingly widespread. Physical participation in a general meeting may be impeded by various natural circumstances, such as the risk of spread of diseases or weather conditions adverse to travel. The same impediments and inconveniences can affect public limited companies, whose shareholders often are in different countries, such that physically attending a general meeting may prove to be excessively burdensome. Therefore, the question of holding general meetings in digital form has become one of the more prominent issues in company law. The article examines whether and to what extent Estonia and other countries (Germany first and foremost, as a country with a legal system similar to Estonia’s, but also the Netherlands and the United Kingdom) regulate holding of public limited companies’ general meetings by electronic means. The article also addresses the main legal problems connected with participation in a general meeting held in digital form.

The Electronic Participation in Corporate Bodies in Lithuania from a Comparative Perspective

Abstract

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