The extended COVID-19 relief measures permitting electronic signatures and virtual meetings are set to expire on 22 March 2021. The Federal Government has released draft legislation aiming to make these changes permanent.
Extended COVID-19 relief
In the midst of the COVID-19 pandemic, the Federal Treasurer provided short-term regulatory relief from provisions relating to meetings and signatures under the Corporations Act 2001 (Cth) and the Corporations Regulations 2001 (Cth).
We discussed this relief in our article Electronic signatures and virtual meetings temporarily allowed under Federal Government determination.
This relief was extended in September 2020 by the Corporations (Coronavirus Economic Response Determination (No. 3) 2020, which repealed and replaced the initial Determination.
Under the new Determination, companies can continue to hold their annual general meetings and other required meetings virtually and company officers can continue to sign documents electronically.
The extension, and therefore its accompanying relief, will end on 22 March 2021.
Following the success of the temporary relief, the Federal Government announced that it intends to ‘make permanent and expand upon’ the current changes. Exposure draft legislation, in the form of the Corporations Amendment (Virtual
Meetings and Electronic Communications) Bill 2020, was released last year.
If enacted, the proposed legislation will allow the use of electronic means or alternative technologies to:
- execute company documents
- hold meetings of directors, shareholders, members (including annual general meetings) or members of a registered scheme
- execute documents relating to meetings
- record, keep and provide minutes
- provide notice of meetings and give other documents relating to meetings to the prospective attendees.
In light of the uncertainty regarding the application of the temporary relief, as set out in our article on the initial Determination, the exposure draft and explanatory memorandum make it clear that, if the draft legislation is passed, the execution of deeds and documents requiring a company seal may occur electronically. This would include allowing electronic witnessing of the fixing of a company seal.
Most of the rules are proposed to be mandatory, rather than replaceable rules, to ensure all companies can access these options if they elect to do so. Therefore companies will not be able to displace or modify these rules in their governing documents.