11 August 2021
Directors across Australia have breathed a sigh of relief as the Treasury Laws Amendment (2021 Measures No. 1) Bill 2021 (Cth) (Bill) was finally passed by Federal Parliament on 10 August 2021. The changes introduced by the Bill will become effective the day after the Bill receives royal assent.
Since temporary measures introduced under the Corporations (Coronavirus Economic Response) Determination (No 3) 2020 (Corporations Determination) expired in March earlier this year, companies have been struggling to reconcile the outdated provisions of the Corporations Act 2001 (Cth) (Corporations Act) with carrying on business as usual while enduring the pandemic.
The Bill amends the Corporations Act so that:
These changes will only remain in effect until 31 March 2022.
The relief previously given to companies to execute documents electronically under the Corporations Determination expired on 21 March 2021. The Bill reintroduces and refines this mechanism to allow companies to execute documents electronically. The Bill will now allow:
For the execution of documents by counterparts, the following conditions must be satisfied:
The Bill introduces provisions into the Corporations Act allowing all companies and registered schemes to conduct hybrid meetings. Virtual meetings may also be held if permitted or required under a company’s constitution.
At a meeting, everyone attending by either physical or electronic means will be taken to be present. This means that all members attending electronically will be counted to determine whether there is a quorum.
Time and location
If the meeting is entirely virtual, it will be taken to be held at the registered office of the company (or scheme). The time at that location will be the reference point for the time that the meeting is held.
Whether meetings are held virtually or otherwise, the Bill requires that the members of a company as a whole must be given a reasonable opportunity to participate. Members must be given the right to speak, comment or ask questions at the meeting, either orally or in writing. If a document is to be tabled at a meeting, the company must make it reasonably accessible to members before or during the meeting. In virtual meetings, this may be done by screen-casting the document.
Companies will now be able to electronically sign and issue any document that relates to a meeting (including members’ resolutions, notices of meetings, notices of resolutions, proxy documents and minute books). Any documents issued electronically must be accessible for subsequent reference.
Documents may be provided by electronic means such as by email or by providing details sufficient to allow members to read or download the documents electronically. In addition, members who would like to receive hard copies of documents relating to a meeting or resolution may request this from the company.
The Bill also now permits company minutes to be recorded and stored electronically, provided the information is accessible for subsequent reference. If minute books are kept electronically, there must be a reliable means of maintaining the integrity of the information. The minutes must still be made available for inspection at the same place a hard copy of the minutes would have been kept.
Authors: Jessica Tanna & Thomas Rubic
The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.