A green light to virtual AGMs and electronic signatures during COVID-19
Following an announcement by Treasurer Josh Frydenberg on Tuesday, temporary amendments to the Corporations Act 2001 (Cth) (Act) took effect yesterday to ensure two things:
- Firstly, to allow companies and other regulated entities which are required (or choose) to hold a meeting, including an Annual General Meeting (AGM), to do so using technology rather than face-to-face meetings. The Corporations (Coronavirus Economic Response) Determination (No. 1) 2020 (Determination) applies to provisions of the Act which require or permit meetings to be held or which deal with the notice or conduct of a meeting. Requirements for physical attendance, quorums, voting, questions and notices can all now be facilitated electronically.
- Secondly, to modify the operation of section 127 of the Act (which regulates the execution of documents by companies) to confirm that electronic execution of a document by a company officer (including an electronic document) will constitute a valid and binding form of execution.
The changes are designed to temporarily modify provisions of the Act governing meetings and document signing which are not compatible with current social distancing and to allow businesses to operate by alternative means consistent with public health requirements. This follows changes to the signing and witnessing process for documents for individuals in NSW (which we previously discussed here) and Queensland (here) arising from COVID-19, and previous announcements by ASIC that it would take a "no action" stance on AGMs.
How long does the relief apply?
The Determination has effect for six months from its commencement, meaning it will be automatically replealed on 5 November 2020 unless extended.
Full details of the Determination are available here.
This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.