The Updated Corporations Act 2001 for Virtual Meetings

The Updated Corporations Act 2001 for Virtual Meetings

The Corporations Act Section 249S previously allowed shareholders to hold meetings at “two or more venues using any technology” as long as the members were given a reasonably ample chance to participate. This also implies the permission to allow hybrid meetings that happen in several venues, linked up by various audio and video means. This section has been repealed by the latest Corporations Act 2001, which has brought forth new provisions in laid out Section 253Q Virtual Meetings.

If you are planning to hold an AGM online,here’s what you need to know about the new legislation Section 253Q Virtual Meetings:

Background

Australian companies were allowed to hold virtual meetings in response to the limitations brought by the pandemic. The Amending Act removes the potential concerns regarding the legal efficacy of such virtual meetings, facilitating the use of proper electronic means to host the meetings.

In broad strokes, the Amending Act permits:

• the use of virtual meeting technology
• inviting persons to be physically present at the designated venue
• inviting persons to be physically present at different venues, equipped with virtual meeting technology to link the venues together
• combining the above methods.

Additional powers

The Amending Act includes additional provisions giving emergency relief powers to the Australian Securities and Investments Commission (ASIC). Under the new regulations, the ASIC can now do the following:

• extend the timeframe for companies to hold an AGM on a class basis;
• allow companies to hold a wholly virtual meeting even after the expiration of the temporary relief provided in the Amending Act; and
• allow ASIC to modify the manner or timeframe in which documents must be given under the Act.

Unlike the other provisions, these additional powers are granted to the ASIC on a permanent basis.

New requirements

The Amending Act has provided more detailed instructions when it comes to planning AGM virtual meetings.

Time and place

For virtual meetings, the members as a whole shall be given a reasonable opportunity to participate. As such, the meeting shall not be invalidated in case of a member encountering technical issues, therefore missing parts of the meeting or being unable to participate.

Sending notices

Sending notices of the meeting and other relevant documents, such as for proxy voting, can be done electronically. This includes giving the documents through electronic communication, as in via email, or through other electronic access such as a website link.

Voting

Under the new regulations, all voting processes in a shareholder meeting held using virtual meeting technology shall be conducted via poll, unless provided otherwise by the company’s constitution. All virtual meetings are also required to provide all meeting participants who are entitled to vote with the opportunity to cast their votes in real-time.

Read Rules and Guidelines for Voting General Meetings

Handling questions

The members as a whole are to be given ample opportunity to exercise their right to participate, which includes asking questions and making comments. They can do so orally or in writing, in which case the virtual meeting technology should have a feature that enables such.

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The Updated Corporations Act 2001 for Virtual Meetings. The Updated Corporations Act 2001 for Virtual Meetings