Virtual AGM’s and electronic communication are here to stay. Following the temporary measures taken by the Australian Government during the COVID-19 pandemic, the Corporations Amendment (Meetings and Documents) Bill 2021 was passed by parliament on 10 February 2022.
The new law has subsequently received assent on 22 February 2022 and will apply to all electronic communication and meetings on or after 1 April 2022. This is a welcome relief for all Australian directors with the expiration of the temporary measures on 31 March 2022.
What are the key changes?
The new legislation has made permanent the temporary relief provided to companies during the COVID-19 pandemic and will allow for Australian companies to use technology in the execution of documents and to send meeting related materials.
• Electronic Execution: Sections 126 and 127 of the Corporations Act 2001 are amended to allow a person exercising the power of the company to execute a document, including a deed, by electronic means. This will include electronic signing of resolutions, minutes of meeting, annual financial reports of a company and notice of members rights. The company’s ability to sign documents using split execution is also made permanent under the new legislation. Signatories are no longer required to sign using the same form or method.
• Meeting Documents: A company may now send documents to their directors, members, or auditors by electronic means.
• Meetings: Companies may now hold hybrid or wholly virtual general meetings. This will include the use of technology in virtual meetings to allow for member participation and to execute a document via electronic means. Please note, conducting a wholly virtual meeting is still subject to the express permission of a company’s constitution.
• Agents: Authorised agents may make, vary, ratify or discharge contracts on behalf of companies in electronic form.
Difference to the temporary measures
Unlike the temporary measures which operated by overriding the company’s constitution, the new legislation will require for the organisation to seek approval from their members to amend their constitution to hold wholly virtual meetings.
For all directors and committee members who are unsure if this is the correct path for their organisation, the legislation has allowed for a 12-month opt-in review of AGM’s to allow for proper assessment of the benefits of electronic communication by the Australian Government. Following this period, final statutory mechanisms will be put into place for electronic communication.
How we can help
If you are looking to review your company constitution, the commercial team at Nodco is available to assist with any questions you may have. Please feel free to email us your enquiry.
Our Corporate & Commercial team is available to assist with any questions you may have. Please email us your enquiry.