The Federal government has made things easier for companies during COVID-19. Amendments to the Corporations Act enable companies to circumvent formal requirements which made signing documents and holding meetings in the current environment difficult or impossible. These practical temporary measures apply to companies during COVID-19 and are set for repeal on 6 November 2020.
Execution of documents by companies during COVID-19
Amendments introduced by the Corporations (Coronavirus Economic Response) Determination (No. 1) 2020 that commenced on 6 May 2020 provide for execution of documents by companies during COVID-19. The amendments mean that a company can execute a document electronically under s 127 of the Corporations Act 2001. The method used must be appropriate in the circumstances, identify the person in the electronic communication and indicate the person’s intention in respect of the contents of the document. The Determination also provides for the execution of a document requiring a common seal, to be executed otherwise: s 6(3).
Meetings of companies during COVID-19
Amendments introduced by the Corporations (Coronavirus Economic Response) Determination (No. 1) 2020 that commenced on 6 May 2020 provide for meetings of companies during COVID-19. The amendments modify the provisions of the Corporations Act 2001 and the Corporations Regulations 2001, or any equivalent provisions in a company constitution, that require or permit a meeting to be held, or that regulate giving notice of a meeting or the conduct of a meeting. These amendments mean that:
- a meeting can be held using one or more technologies that give all persons entitled to attend a reasonable opportunity to participate without being physically present in the same place. This would include platforms such as Zoom, Skype or Microsoft Teams;
- all persons thus participating in the meeting are taken for all purposes, including quorum requirements, to be present at the meeting;
- a vote taken at the meeting must be taken on a poll, and not on a show of hands, by using one or more technologies to give each person entitled to vote the opportunity to participate in the vote in real time and, where practicable, by recording their vote in advance of the meeting;
- a requirement to allow persons attending the meeting to speak, such as asking questions, may be complied with by using one or more technologies that allow that opportunity;
- a proxy may be appointed using one or more technologies specified in the notice of the meeting; and
- notice of a meeting may be given by using one or more technologies to communicate along with any other information to be provided, or details of an online location where the content can be viewed or downloaded. For example, a company could send members an email setting out or attaching a notice of a meeting and any other material relating to the meeting, or else providing a link to where the notice and the other material can be viewed or downloaded.
- a notice of meeting must include information about how those entitled to attend can participate in the meeting, including how they can vote and speak at the meeting.
If notice of the meeting has been given before 6 May 2020 a fresh notice of the meeting that includes the information referred to above must be issued at least 7 days before the meeting is held.
Keep up-to-date with our ‘Dealing with COVID-19 legal issues – Some practical information‘ commentary. This can be found at the top of each By Lawyers Guide.