Temporary COVID-19 economic response: Virtual meetings and electronic execution

Treasurer Josh Frydenberg has introduced temporary amendments to overcome some of the logistical issues faced by companies during the COVID-19 crisis.

Set to expire on 6 November 2020, the Corporations (Coronavirus Economic Response) Determination (No 1) 2020 seeks to assist in mitigating the economic impact caused by COVID-19 on companies and facilitate the continuation of business by removing some of the logistical hurdles faced.

Section 5 – Meetings

Section 5 of the Determination now allows companies to conduct virtual meetings, including Annual General Meetings and Creditors’ meetings, without physical member participation.

The Determination allows:

  • members to use one or more technologies to enable participation for various purposes such as achieving a quorum;
  • members to speak using one or more means of technology;
  • the appointment of a proxy by using technology; and
  • votes to be taken by a poll rather than a show of hands.

Section 5 also modifies notice of meeting requirements. Companies are to send notices to all persons entitled to attend meetings using one or more technologies. The notice must explain how participants can vote and ask questions and must include any other information they need to know to participate using technology.

Section 6 – Electronic Execution

Whilst the Direction applies, companies and its signatories are permitted to:

  • sign a copy or counterpart of a document in physical form (without the company seal); or
  • use electronic communication to execute a document which reliably identifies the person and indicates the person’s intention about the contents of the document.  

The Explanatory Memorandum to the Determination does not seek to restrict the meaning of “electronic communication” and states that, in practice, there are a wide variety of means by which officers of a company might sign a document electronically. These include:

  • pasting a copy of a signature into a document;
  • signing a PDF on a tablet, smartphone or laptop using a stylus or finger; and
  • cloud-based signature platforms like DocuSign.

The Explanatory Memorandum states that operation of the amended provisions will be valid and effective for all purposes provided that the virtual meeting and electronic execution requirements specified above are satisfied.