ByLawyers News and Updates

Meetings and documents – FED

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COVID-related changes which affected the way companies deal with meetings and documents have been made permanent.

Companies and registered management investment schemes are now permanently able to use technology to hold meetings and execute documents under the Corporations Act 2001.

The Corporations Amendment (Meeting and Documents) Act 2022 makes permanent the previous COVID-related changes in the Treasury Laws Amendment (2021 Measures No. 1) Act 2021.

Meetings

A company can choose to hold a meeting:

  • in one or more physical locations;
  • as a hybrid at one or more physical locations and using technology;
  • virtually, if expressly permitted by the company’s constitution.

Members are to be provided with a reasonable opportunity to participate in meetings s 249S. Appropriate notice and provision of sufficient technology for members to participate and vote is required.

Documents

At least once each financial year members may elect to receive documents either electronically or in paper form. A member can request not to be sent any document prescribed in the regulations. The company is required to make notices available on a website and take reasonable steps to provide the member with any requested documents.

The following documents may be provided by the company in electronic or physical form:

  • notices of meetings;
  • resolutions;
  • matters to be considered at a meeting; and
  • minute books.

Execution

Corporate documents can be signed and executed electronically, with company signatories no longer required to sign the document in the presence of a witness physically.

A copy or counterpart of the document can be signed instead of the original therefore split execution is permitted.

Where there is a sole director, but no company secretary, a document is validly executed if:

  • the sole director signs the document; or
  • the sole director witnesses the fixing of the seal.

Where the new rules are followed people dealing with companies are entitled to assume that a document is validly executed.

The permanent changes apply to documents sent and meetings held on or after 1 April 2022.

The By Lawyers Companies guide has been updated to reflect these changes in the way companies may deal with meetings and documents.

COVID measures for companies – FED

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COVID measures for companies have been further extended. These temporary measures are currently set to expire on 31 March 2022.

Company execution

The Treasury Laws Amendment (2021 Measures No. 1) Act 2021 (‘the 2021 measures’) commenced on 13 August 2021. They extend and expand on the measures previously introduced in 2020.

A company can execute a document electronically under s 127 of the Corporations Act 2001. Signatories can sign separate counterpart copies.

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 measures also allow for alternatives to execution normally requiring a common seal.

Company meetings

The 2021 measures also extend and expand on the previous COVID measures for companies holding meetings. They modify the provisions of the Corporations Act 2001 and the Corporations Regulations 2001, or any equivalent provisions in a company constitution, that require or allow a meeting to be held, or that regulate giving notice of a meeting, or the conduct of a meeting. The provisions include:

  • a meeting can be held using one or more platforms such as Zoom, Skype or Microsoft Teams;
  • all persons participating electronically 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 technology to give each person entitled to vote the opportunity to participate in the vote in real time or in advance;
  • persons attending the meeting to speak, such as asking questions, can do so using technology;
  • a proxy may be appointed using technology specified in the notice of the meeting; and
  • notice of a meeting may be given by using technologies. For example, a company could send members an email attaching a notice of a meeting and other material, or provide a link to the notice and the other material for viewing or download.

The By Lawyers Dealing with COVID-19 legal issues – Some practical information publication has been updated accordingly. This helpful summary guide to COVID measures in all states is available at the top of all By Lawyers matter plans.

Companies during COVID-19 – FED

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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.

Updates

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.

Companies – FED

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Following an extensive author review, the By Lawyers Companies guide has been substantially enhanced. Users will find new commentary and a number of helpful new precedents.

The commentary now includes sections on Running a company and Company disputes.

With trademark By Lawyers practicality, the new sections of commentary assist practitioners to advise clients about most of the common issues which arise in the operation of small private companies, from managing company business, conducting meetings, issuing new shares and dealing with various types of company disputes, to negotiating share sales, handling insolvency events and participating in voluntarily winding up. Some aspects of the existing commentary on Setting up a company have also been enhanced and new precedents added.

Users will find the following new precedents have been added to the By Lawyers Companies Guide:

  • Retainer instructions – Company disputes;
  • Initial letter to company which has received a statutory demand;
  • Letter to the client  to make an appointment to sign documentation required for incorporation;
  • Letter to the client advising that the company has been incorporated;
  • Letter to the client with draft shareholder’s agreement;
  • New letters gathering information relevant to company disputes:
    • Letter to client requesting relevant documents;
    • Letter to director requesting inspection of company minutes;
    • Letter to director requesting company records; and
    • Letter to director advising of intention to seek a s 247A order to inspect company records;
  • New option precedents:
    • Notice of exercise of call option;
    • Notice of exercise of option to purchase
    • Notice of exercise of put option;
    • Notice of appointment of nominee;
    • Letter to seller’s solicitor exercising option; and
    • Letter to buyer’s solicitor exercising option;
  • Company resolution; and
  • Minutes of meeting – Directors.

These substantial enhancements to this already popular publication are part of By Lawyers commitment to constantly add value for our users and keep our content updated.

We invite you to peruse the new commentary and precedents in the Companies Guide, located in the Companies, Trusts, Partnerships and Superannuation publication. Also available in the Reference materials folder on each of these matter plans is the helpful reference manual Business structures and comparative table, which compares and contrasts the different types of business structures and considers their advantages and disadvantages, including from a taxation point of view.

 

 

 

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