Amendments to the Corporations Act 2001 (Cth) (Act) by the Federal Parliament have modified requirements relating to electronic execution of documents and the ability to hold online shareholder meetings. The changes, as set out in the Corporations (Coronavirus Economic Response) Determination (No. 1) 2020 (Cth) (Determination), commenced on 6 May 2020 and will remain in force until 6 November 2020. Electronic execution of documents Under the Determination: Documents may be executed electronically under s127(1) of the Act in the form of data, text or images,[1] and Two directors or a director and company secretary can sign two separate copies or counterparts of a document under s127(1). A person will satisfy electronic execution requirements by:[2] Using a method that can identify the person in the electronic communication and indicate the person’s intention with respect to the contents of the document, and Using a method that: Is reliable for the purpose for which the company is executing the document, or Is proven to have fulfilled the purposes outlined above by itself or together with further evidence. The Determination does not specifically address execution of deeds, however it is arguable that deeds would fall within the definition of ‘document’ in the Determination, which is broad and includes any ‘document in electronic form’.[3] The changes only apply to Australian companies, meaning that difficulties with the execution of contracts by other parties (for example, foreign companies and statutory corporations) still remain. Video shareholder meetings Under the Determination, companies may hold general meetings through ‘virtual’ means, regardless of their ability to do so under their Constitution. A meeting may be held using one or more technologies (such as Skype or Zoom) that give all persons attending a reasonable opportunity to participate without being physically present in the same place.[4] Overall, the changes mean that:[5] A quorum can be satisfied entirely by shareholders participating online A vote taken at a meeting must be taken via a poll, not a show of hands Requirements for certain meeting attendees to speak may be complied with by using one or more technologies that allow for that opportunity Proxies may be appointed through using one or more technologies specified in the notice of meeting The notice of meeting must contain information about how those entitled to attend can participate in the meeting (including how they can participate in voting, and speak at the meeting, to the extent they are entitled to do so). The above content is commentary rather than legal advice and was prepared on the basis of applicable legislation, government programs and initiatives that were in place as of the date of publication. Given the ongoing evolution of both the COVID-19 pandemic and frequent consequential changes to the various laws and programs within all Australian states and territories, readers should seek legal advice on the current situation as applicable to their specific circumstances before taking any action in relation to the above. [1] Electronic Transactions Act 1999 (Cth) s5(1) [2] Corporations (Coronavirus Economic Response) Determination (No. 1) 2020 (Cth) s6(4) [3] Corporations (Coronavirus Economic Response) Determination (No. 1) 2020 (Cth) s6(2) [4] Corporations (Coronavirus Economic Response) Determination (No. 1) 2020 (Cth) s5 [5] Corporations (Coronavirus Economic Response) Determination (No. 1) 2020 (Cth) s5
