In response to the COVID-19 crisis, temporary relief measures amended the Corporations Act to allow companies to hold their AGMs and other required meetings virtually and to allow company officers to sign documents electronically.
Parliament was considering the Treasury Laws Amendment (2021 Measures No. 1) Bill 2021 to extend these relief measures. However, the Bill failed to pass on the last sitting day before the temporary measures lapsed on 22 March 2021.
Debate on the Bill has now been adjourned until the first sitting day on 3 August 2021.
Effectively this means the pre-COVID requirements under the Corporations Act relating to execution by company officers and the holding of company meetings again apply.
In relation to execution of documents, this means the return of uncertainty surrounding the validity of electronic signing and split execution by company officers under section 127 of the Corporations Act.
With regard to company meetings, there is again doubt about the legitimacy of virtual-only shareholder meetings and notices of meetings will need to be sent in line with pre-COVID requirements – i.e. only sent electronically where the shareholder has opted to receive notices in this manner.
In a move to provide the market with more certainty following the lapse of these measures, ASIC yesterday (23 March 2021) published a media release stating that it would shortly adopt a temporary 'no action' position in relation to the convening and holding of virtual meetings. Details of this position will shortly be made available by ASIC but it has flagged that the position will:
- support the holding of meetings using appropriate technology
- facilitate electronic dispatch of notices of meeting including supplementary notices
- allow public companies an additional two months to hold their AGMs.
ASIC has stated it will not be providing a no action position in relation to electronic signing under the Corporations Act.
From 22 March 2021 onwards, the safest method to ensure the
validity of execution by company officers will be to revert to
signing documents, particularly deeds, in wet ink and on a single
static counterpart of the document.
Companies should also resume compliance with the pre-COVID requirements under the Corporations Act relating to the calling and holding of shareholder meetings.
Cooper Grace Ward is a leading Australian law firm based in Brisbane.
This publication is for information only and is not legal advice. You should obtain advice that is specific to your circumstances and not rely on this publication as legal advice. If there are any issues you would like us to advise you on arising from this publication, please contact Cooper Grace Ward Lawyers.