Companies can now hold meetings and execute documents online
The federal government has introduced new legislation to modify the requirements for company meetings and the execution of documents by companies under the Corporations Act.
The new changes will take effect from 6 May 2020 and are outlined in the Corporations (Coronavirus Economic Response) Determination (No. 1) 2020.
The Determination provides the following changes for board meetings:
- notice of meetings may be given using technology (e.g. by email);
- meetings can be held online, and a quorum can be achieved online;
- voting must be taken on a poll and not on a show of hands, and where practical votes should be recorded in advance of the meeting.
The Determination is clear that meetings must continue to provide all shareholders with a reasonable opportunity to participate during the meeting including asking questions.
Execution of documents
The Determination also modifies section 127(1) of the Corporations Act to allow company officers to:
- sign counterparts of a document provided it is in a physical form; or
- sign or otherwise indicate acceptance in a way that satisfies the electronic acceptance requirements under the Electronic Transactions Act 1999.
Some examples of how a document might be signed electronically in accordance with the Determination include:
- where the company officers sign different physical copies of the document;
- where one company officer signs a physical copy and emails this copy to another officer who prints and physically signs the copy.
- where electronic signatures are applied to the document online e.g. by pasting a copy of a signature into the document or by signing a PDF copy of the document on a computer or smartphone.
Overall the above changes are promising and will allow for companies to continue to conduct business as usual.
Please note the above changes are only temporary and will only be in effect for 6 months.
If you have any further questions please do not hesitate to contact our office on 9523 5535 or email firstname.lastname@example.org