MELBOURNE, Australia - May 13, 2020 - The government has announced that it is providing certainty to companies and boards about how they can meet their legal obligations over the next six months. The changes will allow companies to convene annual general meetings, and other meetings prescribed under the Corporations Act 2001, entirely online rather than face-to-face. The changes will also give businesses certainty that when company officers sign a document electronically, the document has been validly executed.
These changes are being made under the instrument-making power that has been inserted into the Corporations Act 2001 as part of the government's response to the COVID-19 crisis. Under the social distancing measures that are currently in place, it is difficult for the shareholders to physically gather with members of the board at annual general meetings.
Accordingly, Corporations (Coronavirus Economic Response) Determination (No 1) 2020 has been made, dealing with provisions about meetings and document signatures that are not compatible with public health requirements for social distancing during the Coronavirus pandemic.
Under the changes, company boards will be able to:
• provide notice of annual general meetings to shareholders using email
• achieve a quorum with shareholders attending online, and
• hold annual general meetings online.
Meetings must continue to provide shareholders with a reasonable opportunity to participate. As a result, shareholders will be able to put questions to board members online and vote online.
Further changes will also allow company officers to sign a document electronically. Previously, in a number of cases, signatories were required to sign the same physical document. This will ensure that documents are able to be properly executed at a time when ordinary business operations have been disrupted.
These changes will be in effect for six months from 6 May 2020.
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