Sign of the times: electronic execution now embedded in the Corporations Act
On 22 February 2022, the Corporations Amendment (Meetings and Documents) Act 2022 came into force to modernise the Corporations Act 2001 (the Act). The amendment permanently embeds the temporary amendments for electronic signing that were due to expire on 31 March 2022 (see our earlier insight here).
Changes to the Corporations Act
The Bill amends the Corporations Act to allow:
- Electronic Execution of Documents;
- Companies to hold hybrid or virtual meetings; and
- Sign and provide meetings-related documents electronically
Electronic Execution
The changes introduced by the Bill will give companies the option of executing certain documents electronically and remove ambiguity around this process.
The Documents that can be signed electronically include:
- Deeds
- Agreements
- Any document for purposes of section 9 of the Corporations Act
These documents may now be signed in accordance with ss 126 and 127 of the Act by signing either a physical or electronic form of the document. Documents can be signed by way of split execution and different execution methods can be used.
Virtual meetings
Companies can now hold meetings of members either in person, hybrid or wholly virtual (but only if this is expressly required or permitted by the company constitution). If a member is attending a meeting virtually, they must be given reasonable opportunity to participate including by hosting it at an appropriate time and ensuring reasonable technology is used that allows a member to ask questions or make comments.
Sending meeting documents
The Bill permanently enables any documents relating to meetings to be signed and given electronically (regardless of the format in which the meeting will be held). The Bill also introduces a requirement for members to be notified of their right to elect to receive a document electronically or in physical form 'at least once' each financial year.
Implementation
The Bill will apply to documents executed on or the day after Royal Assent. For documents sent and meetings held the provisions will apply from 1 April 2022. If your company’s constitution does not currently permit virtual meetings, you will need to update it to allow the option to hold a virtual meeting after 1 April 2022.
