Electronic execution and online meetings – permanent reforms are on the way

On 25 June 2021, Commonwealth Treasury issued an exposure draft of legislation to make permanent reforms to the Corporations Act in relation to electronic execution of documents and online meetings.

The exposure draft legislation is designed to make permanent the temporary measures contained in the Treasury Laws Amendment (2021 Measures No.1) Bill 2021 (TLAB) that as at the date of writing remains before the Senate.

The exposure draft (Treasury Laws Amendment (Measures for Consultation) Bill 2021) changes some of the policy settings in TLAB, in particular:

• hybrid meetings (part in person and part online) will be facilitated;
• virtual-only meetings will be facilitated only where the company’s constitution requires or permits virtual-only meetings – this is a key change from TLAB;
• shareholders’ rights to ask questions or speak at meetings can be exercised either orally or in writing – meaning written only questions may be a thing of the past;
• execution of documents by sole director companies will be facilitated
• new rights will be conferred to allow an independent person to have oversight of a poll and/or provide an independent report on a poll on request by shareholders with at least 5%.

To reprise, when passed TLAB will:

• facilitate giving notices of meetings electronically, including by sending a written communication with sufficient information to allow access of a notice electronically (for example a postcard with a hyperlink)
• require companies to communicate with members to give them an option to receive hardcopy communications
• facilitate electronic minutes including signing of minutes
• facilitate electronic execution of documents by companies, including deeds.

It is hoped that both TLAB and the exposure draft legislation will be passed by the last sitting day in September 2021, in good time before the opening of the 2021 AGM season.