Temporary amendments to the Australian Corporations Act 2001 (Cth) (Corporations Act) took effect on 6 May 2020, making it easier to facilitate company meetings using remote technology, and providing some certainty as to companies’ execution of documents electronically under section 127(1) of the Corporations Act.
The Corporations (Coronavirus Economic Response) Determination (No. 1) 2020 (Determination) allows company meetings such as AGMs to be held using technology rather than face-to-face meetings, and enables a quorum, votes, notices and the asking of questions to be facilitated electronically. For a more in-depth look at these changes, see “Operating a Business During COVID-19: The Implications for Public Companies” by our colleagues Harry Kingsley, Kaveh Zegrati, and Alex Garfinkel.
The Determination also resolves some previous uncertainty as to whether a company’s electronic execution of an agreement under section 127(1) of the Corporations Act was valid, to ensure that when company officers sign a document electronically (including an electronic document), the document has been validly executed. It also expressly permits split execution by companies under section 127(1).
Interestingly, the approach taken has been to modify the Corporations Act rather than amend the regulations to the Electronic Transactions Act to allow it to apply to the Corporations Act. However, the Determination uses language from the Electronic Transactions Act to ensure that a technology-neutral approach is applied.
The Determination has effect for six months from 6 May 2020, however the hopes of many are that this kind of change operates as a useful pilot and paves the way for these solutions to become more permanent in a post-lockdown world.