Until recently, Wisconsin was one of 18 states that prohibited on‑line shareholder meetings. The Wisconsin Business Corporation law was modified November 27, 2017 to permit Wisconsin corporations to hold virtual shareholder meetings. Previously, Wisconsin law required corporations to hold in-person shareholder meetings, although the law permitted virtual Board of Director meetings. The new law doesn’t mandate that corporations conduct virtual meetings; it simply gives companies an option that previously wasn’t available. A corporation’s Board of Directors may allow shareholders not physically present at a shareholder meeting to participate in the meeting by means of remote communication and to be considered to be present in person or to vote at the meeting. To take advantage of the virtual meeting option, a corporation must:
- Have implemented reasonable measures to verify that each person was considered to be present and permitted to vote at the meeting by means of remote communications as a shareholder;
- Have implemented reasonable measures to provide shareholders a reasonable opportunity to participate in the meeting and to vote on matters submitted to the shareholders, including an opportunity to read or hear the proceedings of the meeting concurrently with the proceeding; and
- Maintain a record of voting or action by shareholders by means of remote communication.
A company seeking to conduct a virtual meeting would need to ensure that its governing documents permit virtual meetings. This may include amending the bylaws to specifically permit the Board of Directors to determine that a shareholder meeting will be held by means of remote communication or with remote communication as a supplement to a physical meeting.
Virtual shareholder meetings are becoming popular among publicly-traded corporations, and such meetings are allowed by the federal Securities and Exchange Commission. Non‑publicly-traded companies and family‑owned companies are finding that virtual shareholder meetings are a useful tool if shareholders live in geographically diverse areas. Providing authority for a virtual meeting may be a useful tool for your corporation.
You can review the full text of the new law here. Additional guidance or assistance may be obtained from the LCOJ Business Team.