17 August 2021

Electronic execution by companies – COVID-19 relief resurrected

On 13 August 2021, the Treasury Laws Amendment (2021 Measures No.1) Act 2021 (Cth) was passed in response to the extended effect of COVID-19 and effectively resurrects previous temporary relief measures to support administrative functions of companies.

In summary, the Act temporarily authorises the following:

Action

Temporary relief

Practical Tips and Comments

Execution under section 127 of the Corporations Act 2001 (Cth)

Documents (including deeds) can be executed electronically. 

Signatories can sign separate counterpart copies of an identical document. 

A method should be used to:

- identify and authenticate the person; and

- indicate the person’s intention to sign the document as is appropriate in the circumstances.  

Examples of where a person does this is if:

- they use a stylus tool to sign and then return the signed document from their email account; or

- they use a formal eSignature platform such as DocuSign.

Director and member meetings

Meetings can be held electronically provided that the persons entitled to attend the meeting have a reasonable opportunity to participate.

The Notice of Meeting must include sufficient information to allow all attendees to participate and the quorum includes all persons participating virtually.

The company may give a participant the opportunity to vote in advance of the meeting.

The Notice of Meeting should detail how a participant can login, listen, ask questions and vote at a virtual meeting.

The meeting will not be invalidated merely because a participant experiences technical difficulties.  However, the vast majority of participants must be able to participate.

Documents for director and member meetings

Documents may be circulated electronically.

A document will be considered sent electronically if a link to the document is sent.

Documents relating to a meeting of members cannot be provided to a person electronically if:

- the member has opted-in to receiving hard copies; or

- the company failed to notify the person of their right to opt-in.

Director and member minutes of meeting

Companies may keep an electronic minute book.

An electronic minute book must be:

- a reliable means of maintaining the integrity of the minutes; and

- readily accessible to those who would be entitled to that information.

 

These temporary measures expire on 31 March 2022, at which point we go back to the previous legal position.  The Government however is still considering whether to make these changes, or a version of these changes, permanent.

Authors: Eric Kwan & Claire Perry

Contributing partner: Michael Cossetto