Company Meetings and Document Signing
Meetings
As of 6 May 2020, companies in Australia will be able to convene annual general meetings and other meetings prescribed under the Corporations Act 2001 entirely online rather than face-to-face thanks to the Corporations (Coronavirus (Coronavirus Economic Response) Determination (No.1) 2020.
As contemplated in paragraph 5 of the Determination a company that has email addresses for some of its members can now send those members an email setting out or attaching notice of a meeting, and other material relating to the meeting, or providing a link to where the notice and other material can be viewed or downloaded. To the other members, the company could send a letter or postcard setting out a URL for viewing or downloading the notice and other material.
As noted above, under the changes, companies will also be able to:
- achieve a quorum with participants attending online; and
- hold meetings online.
Meetings must continue to provide participants with a reasonable opportunity to participate. As a result, at shareholder meetings for example, members will be able to put questions to board members online and vote online: see paragraph 5 and (d) of the Determination.
Documents
Further changes will also allow company officers to execute documents electronically. Previously, in a number of cases (see for example Bendigo and Adelaide Bank Ltd & Ors v Kenneth Ross Pickard & Anor [2019] SASC 123) signatories were required to sign the same physical document, i.e. there needed to be a single, static document that both officers sign, rather than there being a situation where two electronic signatures are sequentially applied to an electronic document. The changes introduced by the Determination are said to be aimed at ensuring that documents are able to be properly executed electronically at a time when ordinary business operations have been disrupted.
Timing
The changes contained in the Determination will be in effect for six months only and will be repealed on 5 November 2020.
For further information, please contact:
Sean Greenwood
Phone: +61 2 9777 8315
Email: stg@swaab.com.au
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.