Under the social distancing measures currently in place, it has been difficult for members and shareholders to physically gather for the purpose of Annual General Meetings and other general meetings.
In the absence of a specific provision in the company’s Constitution, physical attendance at a meeting has been required to achieve the required quorum for a meeting to proceed.
Meanwhile, although many Boards have been able to continue their scheduled meetings through Zoom or other videoconferencing, the execution of documents by directors and other officeholders has still presented a problem.
These issues have now been addressed through the Corporations (Coronavirus Economic Response) Determination (No. 1) 2020, which takes effect on 6 May 2020 (Determination). The Determination will be in force for 6 months.
Meetings of members or shareholders
The Determination now allows a meeting to 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 and to count in any required quorum.
If a meeting is held in this way, voting must be by poll using appropriate technology and where practicable by the recording of the vote prior to the meeting, rather than the traditional method of a show of hands.
Notice of the meeting and applicable attachments can be given using one or more technologies to communicate to those entitled to receive notice of the meeting. Where the company has an email address for a member or shareholder, it can send the notice by email, and for those members or shareholders who it has a paper address only, it will be sufficient to send a letter or postcard setting out the URL for viewing or downloading the notice, rather than attaching the notice and other documents.
The appointment of a proxy may also be made using technologies specified in the notice of meeting.
If these new provisions are to be relied on, it is critical that information be included in the notice of meeting as to the modified processes, including how a person can participate in the meeting and the process for them to vote and speak at the meeting.
A person is entitled to assume that a document has been duly executed by a company if the document appears to have been signed in the manner set out in section 127 of the Corporations Act.
Previously in a number of cases, this required the signatories for the company to be present together, or at least sign the same physical document. This has presented difficulties in the context of the operation of the current stay at home rules made under the NSW Public Health Order.
The Determination extends the manner of signing documents under section 127 of the Corporations Act. It now also allows the signatories to execute a document (including a document in electronic form) without a common seal if they each sign a counterpart of the document that is in physical form or if they sign the document electronically.
There is a reasonably wide scope for signing electronically, and in addition to the commonly used platforms such as Docusign, contemplates the sending of an electronic document with a clear indication of the person’s intention in respect of the contents of the document without an actual signature, provided that the entire contents of the document are included, the requirements of the Determination have been met regarding identification and that this approach is reasonable in the particular circumstances.
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