Summary

During a time where physical distancing is mandatory, the Australian Government has implemented temporary measures which provide certainty to companies and boards about how they can meet their legal obligations over the next six months.

On 5 May 2020, The Hon Josh Frydenberg MP announced the temporary six-month changes to certain provisions of the Corporations Act 2001 Cth (the ‘Act’) with the Corporations (Coronavirus Economic Response) Determination (No 1) 2020 instrument.

The changes allow for the following:

1. companies to give notice of, convene and conduct meetings electronically; and
2. company officers to sign documents electronically.

The changes are now in force and will cease operation on 6 November 2020.

Practical Requirements of Meetings

• The technology engaged to conduct the virtual meeting must give all persons entitled to attend a reasonable opportunity to participate in the meeting; vote and ask questions in ‘real-time’.
• A quorum is determined by the number of persons who participate in the virtual meeting.
• Votes taken at the meeting must be taken on a poll and not a show of hands and can be taken during or recorded before the meeting.
• A proxy can be appointed using one or more of the technologies recorded in the notice of meeting.
• The person conducting the meeting must treat the proxy in the same way as the appointor as if he or she had attended in person.

Practical Requirements of Notices of Meetings

• Notices of meeting and any documents required to be given with such notices may be given electronically, such as via email or by way of electronic links to where the notice and relevant documents can be viewed or downloaded electronically.
• The notice of meeting must include information explaining how the persons entitled to attend and participate in the meeting are able to do so (as well as by proxy), how they can vote and speak at the meeting, and must offer information regarding the technology that will be employed to facilitate the virtual meeting.
• If you have given notice of a meeting prior to 6 May 2020 and you wish to conduct this meeting electronically, you must issue a fresh notice of meeting, at least 7 days before the meeting is held, advising how eligible participants can participate remotely.

Signing Company Documents

Section 127(1) of the Act is modified to permit the execution of documents by a company:

In counterpart

For example:

• wet or electronic signature on one or more counterparts of the document

Electronically

For example:

• pasting a copy of a signature into a document;
• signing a PDF on a tablet, smartphone or laptop using a stylus or finger;
• cloud-based signature platforms like DocuSign.

By other electronic communication

For example:

• By email. The electronic communication must:
  • identify the person sending the communication;
  • their position within the company and, if necessary, their authority to bind the company;
  • include the entire content of the document in the communication (attaching the document to the email will suffice);
  • the person’s intention in relation to the contents of the document (agree to its terms and for the company to be bound to it).

Statutory Assumptions Still Apply

Where a document is expressed to have been signed in accordance with s127(1) of the Act, it includes any document (and its counter-part) that has been validly signed in accordance with this instrument.

The presumptions prescribed by s129(5) of the Act continue to apply to any document signed by a company under this instrument.