Annual General Meetings
Earlier today, ASIC released guidelines for upcoming AGM requirements as companies are impacted by social distancing requirements in response to coronavirus (COVID-19). Please click here to read more.
Hybrid or virtual AGMs
Holding a ‘hybrid’ or ‘virtual’ AGM facilitates electronic participation and voting by proxy which are alternatives well suited to the recent government guidelines restricting large gatherings and encouraging social distancing. Hybrid AGMs are permitted under s 249S of the Corporations Act, however ASIC has stated that it does not have the power to modify the Corporations Act to assist entities that do not provide for virtual or hybrid AGMs in their constitutions, or to enforce the validity of any resolutions passed at such AGMs.
ASIC encourages entities that choose to hold a hybrid or virtual AGM to consider the following:
- Whether the technology used provides members with a whole and reasonable opportunity to participate;
- The legal status of hybrid or virtual AGMs according to the company constitution;
- To seek legal advice on section 1322 of the Corporations Act 2001 to ensure the validity of a hybrid or virtual AGM where there is uncertainty; and
- To consider relying on ASIC’s ‘no-action’ position on deferred AGMs in the alternative.
ASIC has confirmed that it will take no action against entities with 31 December balance dates that fail to comply with s250N(2) of the Corporations Act 2001, provided they hold an AGM by the end of July 2020. ASIC Commissioner John Price emphasized the need for flexibility and pragmatism in addressing the effects of COVID-19, and, as such, the two month extension period will remain under continuous review.
We are here to help – please let us know if you have any queries on hybrid or virtual AGMs, deferring your AGM, or a review of your constitution.
This article was written by Grant Hummel, Partner, Lily O’Keefe, Law Graduate and Morgan Gabriel, Law Graduate.