Amendment to the Corporations Act - technology use

The law now allows technology use for company meetings and execution of documents.

This change was made in response to the social distancing and health requirements amid the Covid-19 pandemic.

What are the key changes?

The key changes introduced are as follows:

Meetings

1. Meetings may be held using technology, allowing participation without the need for physical presence.
2. Notice of meetings can be given via email (if the company has the email address of the members).
3. Proxies may be appointed using technology as specified in the notice of meeting.
4. A quorum can be achieved by attendance via technology.
5. Voting can be done in advance or otherwise by poll (as opposed to a show of hands) using technology.
6. Opportunities to speak and ask questions via technology must be given.

These changes apply to meetings of shareholders and meetings of creditors in relation to corporate insolvencies.

Companies should not forget to have regard to their constitutions or other relevant documents which may contain requirements about meetings.

Execution of documents

7. Directors and company secretaries can sign documents electronically without using a common seal.
8. Electronic execution may be done including as follows:

        a. pasting a copy of a signature into a document;
        b. signing a PDF on a tablet, smartphone or laptop using a stylus or finger;
        c. cloud-based signature platforms like DocuSign.

9. Signatories can now sign multiple counterparts of a physical document, rather than signing the same document. This means that a document could be signed and scanned across by the first signatory and then printed and signed by the second signatory, or separate electronic signatures could be applied to fully electronic versions of the document.
10. The full document must be signed as opposed to just the counterpart of the execution page.

When did the changes take effect, and how long will they last?

The changes came into effect on 6 May 2020.

The changes will apply on a temporary basis for 6 months until 6 November 2020.

Going forward

These are welcomed changes amid these uncertain times and will assist with ensuring community safety and continued business operations.
 
Staying healthy and keeping each other safe, while achieving business success, is the priority.
 
The team here at Hicksons is on deck and ready to provide expert support on the changes and issues.

Posted by Marc Rossi.