With the introduction of social distancing measures, several conundrums arose for companies – for example, how could they hold an annual general meeting (AGM) or validly execute documents with restrictions on the number of people that could be physically in one place? Yesterday’s government announcement (discussed below) provides greater clarity and confidence for companies planning to convene a meeting or execute documents.
GRT Lawyers has been at the forefront of advice to companies on conducting hybrid and virtual AGMs and compliance with document execution requirements.
Conducting Virtual Meetings
Yesterday, the Hon. Josh Frydenberg MP announced that companies will be allowed to convene AGMs, and other meetings prescribed under the Corporations Act 2001 (Cth), entirely online rather than face-to-face.
This change to conducting meetings under the Corporations Act is in effect from 6 May 2020 for a period of six months.
Conducting a virtual meeting must have votes taken on a poll, rather than a show of hands. However, this was already recommendation of the ASX’s Corporate Governance Council. Other requirements for conducting a meeting may also be satisfied using one or more technologies, such as: achieving quorum, providing the opportunity to speak (for example, to ask questions), appointing a proxy and providing the notice of meeting itself.
Electronic Signing of Documents
The Treasurer also made changes to give companies certainty that documents electronically signed by officers are validly executed. Importantly, companies should note:
- the entire contents of the document must be included in the copy, counterpart or electronic communication; and
- the officer electronically signing the document must be appropriately identified.
The Legislative Instrument does not mention the proposed treatment of signing of deeds electronically. Companies wishing to execute deeds should look at whether these can be done in counterparts by company officers rather than relying on electronic execution.
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If you have any questions in relation to the above article, please phone Scott Standen on 0447 790 009 or Glenn Vassallo on 0422 857 760.