The Treasurer of Australia has issued a legislative instrument modifying certain provisions of the Corporations Act 2001 (Cth) (the Act). The modifications have been implemented in response to several practical restrictions that have arisen in complying with public health requirements for social distancing during the Coronavirus pandemic.
The enactment of the Corporations (Coronavirus Economic Response) Determination (No. 1) 2020 (the Determination) deals with provisions about meetings, communication and the signing of documents facilitating the use of technology.
The changes come into effect 6 May 2020 and will remain in place for a period of 6 months.
Meetings via technology
The changes allow for the use of technology in the operation of meetings, allowing participation without having to be physically present.
Several changes outlined in s 5 of the Determination include:
- Quorum can be calculated including participation by technology;
- Voting is to be conducted through a poll, as opposed to a show of hands, using technology. Voting can also be done in advance (s 5(1)(c) of the Determination);
- Persons attending the meeting must be allowed the opportunity to speak using technology;
- Proxies may be appointed using one or more of the technologies specified in the notice of the meeting;
- Notice of meetings and any other information can be given via email (without the need for a specific Court order) where an email address is available for members of a company.
Execution of Documents
Documents, which include documents in electronic form, may execute a document without using a common seal (s 6 of the Determination) if:
- 2 directors of the company; or
- a director and a company secretary of the company; or
- the sole director/company secretary of a proprietary company,
- sign a copy or counterpart of the document that is in a physical form; or
- use electronic communication which identifies the executing person and their intention in respect of the contents of the document.
These changes allow for documents to be signed electronically by directors and company secretaries.
The changes apply to meeting provisions of the Act, the regulations and the Insolvency Practice rules that:
- require or permit meetings to be held; or
- regulate giving notice of a meeting or the conduct of a meeting; or
- give effect or provide a means of enforcing a company to act as in (i) or (ii).
The changes to the Act therefore apply to creditors’ meetings in corporate insolvency appointments.