The new-age of company meetings and document execution—a COVID legacy

Holding virtual and hybrid meetings 

The Bill will allow companies and registered schemes to hold meetings:

• at one or more physical locations (a physical meeting)
• at one or more physical locations and using virtual meeting technology (a hybrid meeting), or 
• using virtual meeting technology only if this is expressly permitted or required by the constitution (a wholly virtual meeting). 

These laws also apply to companies registered as body corporates under the Australian Charities and Not-for-profits Commission Act 2012 (Cth). 

The Bill is not prescriptive about how a meeting should be conducted. Rather, it allows entities to select the meeting format most appropriate for that entity. All persons participating in the meeting (whether physically present or using electronic means) are taken to be ‘present’ and are counted as part of the meeting quorum. However, an entity must ensure that all members are given a reasonable opportunity to participate. This means that first, for physical and hybrid meetings, the physical venue must be reasonable. Second, the meeting must be held at a reasonable time. Third, reasonable technology must be used to connect more than one physical venue or facilitate virtual attendance. For instance, this technology must be sufficient to allow members to vote. 

Sending notices electronically

The Bill permanently allows an entity to give meeting related documents to a person electronically or in physical form. Examples of such documents include, but are not limited to; notices of meetings, notices of (or a record of) a resolution, notices of statement in relation to a meeting or a matter to be considered at a meeting, and minute books.

A document may be provided either by:

• sending the document in physical form
• giving the document to the person by using electronic means (such as sending an email)
• providing the person (in physical or electronic form) with details sufficient to allow them to view or download the document electronically (such as sending an email with a link to a website), or
• in any other permitted way (such as in a way permitted by a more specific provision dealing with how a particular type of document is sent or a way which is set out in the company’s constitution).

An entity and members can elect to receive notices in hard copy or may choose not to receive certain documents. A member is entitled to make an ad hoc request to receive a document electronically or in physical form. Where this occurs, the company must be given at least 30 days to comply.

Members of public companies, disclosing entities and registered schemes must be notified at least annually of their right to elect to receive a document in either physical form or electronic form.

Execution of documents 

Part 1.2AA of the Bill permits companies to execute documents (including a deed) in flexible and technology neutral manners. It makes clear that corporate documents lodged under the Act can be signed and executed electronically and does not prescribe specified methods of execution. Namely, company signatories will no longer be required to physically sign documents in wet-ink or in the presence of a witness.

The Bill also allows for 'split execution’ of corporate documents, meaning that a document will be considered validly executed where different officers sign different copies of a document. Further, a person who is a director of more than one company may now sign a document once on behalf of all the companies to which that director is appointed. 

Additionally, the practice of executing signature pages of a document only (rather than a complete document) will be permitted under the Act. 

Agent’s power to execute a document

The amendments to s 126 of the Act allow individuals with express or implied authority (agents) to make, vary, ratify or discharge a contract or execute documents (including deeds) on behalf of a company, without having to be appointed by a deed to do so. This overrides the common law position that an agent cannot execute a deed without being appointed by deed.

Statutory assumptions apply to proprietary companies with a sole director

The Bill has amended s 127 of the Act so that sole directors of proprietary companies without a company secretary are now authorised to sign documents. The assumptions that persons are entitled to make in relation to dealings with a company under s 129 of the Act have also been updated to reflect this change, as well as the changes to s 126 of the Act.  

New law

Current law/temporary relief measures

Certain corporate documents, including documents relating to meetings of members, can be signed in technology neutral and flexible manners. 

Documents relating to a meeting may be signed electronically using a method to identify the signatory and indicate the signatory’s intention until 31 March 2022.

Agents can make, vary, ratify or discharge contracts and execute documents (including deeds) on behalf of companies. 

Agents can make, vary, ratify or discharge contracts on behalf of companies. 

Companies can execute documents in flexible and technology neutral manners.

Company documents executed both with and without a seal may be executed using electronic means. If the document is executed by fixing a company seal, electronic means may be used to witness the fixing of the seal (in force until 31 March 2022). 

Proprietary companies with a sole director and no company secretary can use the statutory document execution mechanisms.

Proprietary companies with a sole director and no company secretary cannot use the statutory document execution mechanisms.

Members of companies and registered schemes can elect to receive meetings related documents electronically or in hard copy.

The Corporations Act only provides for members of companies and registered schemes to elect to receive meetings related documents until 31 March 2022.

Companies and registered schemes can hold meetings of members at one or more physical locations (physical meeting), at one or more physical locations and using technology (a hybrid meeting), or if permitted by an entity's constitution, as a wholly virtual meeting. 

Companies and registered schemes can hold wholly virtual meetings of members, regardless of requirements in the constitution until 31 March 2022.

A member or group of members of a company or registered scheme with at least 5% of the votes can request to have an independent person appointed to observe and/or prepare a report on a poll conducted at a members meeting

No equivalent.

Votes on resolutions that are set-out in the notice of a meeting of members of a listed company or listed registered scheme must be decided on by poll. A listed company’s constitution is not capable of providing otherwise.

Votes on all resolutions at a physical meeting of a company or registered scheme’s members are decided on by show of hands unless a company’s constitution provides otherwise. If the meeting is held using technology, the default method for voting is a poll.