As a result of a Determination made by the Treasurer, the Corporations Act 2001 and the Corporations Regulations relating to company meetings and the execution of documents by companies were amended.
The Corporations Coronavirus Economic Response Determination (No 1) 2020 (Act) took effect on 6 May 2020 and will expire on 6 November 2020.
Meetings
How can meetings be held?
- Meetings may be held using one or more technologies that give all persons entitled to attend the meeting a reasonable opportunity to attend without being physically present;
- All persons participating in the meeting are taken for all purposes (ie a quorum requirement) to be present at the meeting whilst participating;
- A vote must be taken on a poll and not a show of hand by using one or more technologies to give each person are right to participate and where practicable, recording their vote in advance of the meeting;
- Each person participating in the meeting is allowed to speak by using one or more technologies;
- Proxy may be appointed using one or more technologies specified in the notice of the meeting;
- Notice of the meeting may be given and any information provided with the notice of the meeting using one or more technologies. Where a company has email addresses for some of its members, the company could send the members an email setting out or attaching the notices together with all other information or providing a link to the notices or materials. Where members have not provided their email address to the company, the company can send a letter by post setting out the URL for viewing or downloading.
Notice requirements
- To comply with the notice requirements, all notices must include information setting out how each member can participate in the meeting (including how they can participate in a vote taken at the meeting, speaking at the meeting and to the extent they are entitled to do so) (Notice Requirements).
- If a notice of the meeting was given before the commencement of the Act, a fresh notice must be given 7 days before the meeting is held setting out the items in the Notice Requirements.
- An appointor is entitled to attend the meeting or to vote at the meeting by proxy as if he or she attended the meeting in person.
Execution of Documents
The Act modifies section 127(1) of the Corporations Act 2001 which deals with execution of a company without using the common seal. The Act permits the signatories:
- to execute physical documents in counterparts; or
- to execute or otherwise accept a document which satisfies the requirements of the provisions in the Electronic Transactions Act 1999 in relation to electronic acceptance provided that:
- a method is used to identify the person in the electronic communication and to indicate the person’s intention in respect of the contents of the document; and
- the method used is as reliable as appropriate for the purpose for which the company is executing the document, in light of all the circumstances, including any relevant agreement.
The copy, counterpart or electronic communication must include the entire contents of the document but does not need to include the signature of the other person signing the document.
As a result of the changes, signatories do not need to sign the same physical document. A document can be signed and scanned by one signatory and then printed and signed by the second signatory or separate electronic signatures can be applied to the electronic versions of the document.
In addition section 129(5) of the Corporations Act 2001 is amended that if the above methods are used, then the third party entering into a document with the company can rely on the assumptions.
Some examples given as to how to execute:
- A signatory can past a copy of their signature onto the document;
- A signatory can sign a PDF on a tablet, smart phone or laptop using a stylus or finder;
- Cloud based signature platforms such as DocuSign.
This article was written by Kathy Gray, Partner and Andrea Shan, Solicitor.
