On 6 May, the Federal Government enacted the Corporations (Coronavirus Economic Response) Determination (No. 1)(“the Determination”) 2020.
The COVID-19 pandemic has significantly altered the way we do business and interact with each other. In light of this, the Federal Government has made short-term legislative amendments to facilitate the continuation of business and to mitigate the economic impact of COVID-19.
What are the changes?
The Determination has enabled companies to continue to meet their legislative obligations by helping them in two main areas:
The Determination now allows companies to convene meetings – such as annual general meetings – through the use of electronic conferencing technologies, while current public health restrictions are in place.
A quorum can now be reached through virtual participation rather than physical attendance.
Regarding voting, a virtual show of hands may not be used, instead a poll must be taken and each person entitled to vote must be given the opportunity to vote in real time and if practical, ahead of the meeting.
B. Execution of company documents
A rather significant change to the current legislation, is the modification to s 127 of the Corporations Act (Cth)(“the Act”) which relates to the execution of dealings by signatories on a company’s behalf.
The Determination now allows dealings, which are required to be signed by a company, to be signed electronically by:
pasting a copy of a signature into a document;
signing a PDF on a tablet, smartphone, or laptop; or
using a cloud-based signature platform like DocuSign.
This process will eliminate the need for signatories to sign the same physical document as long as reasonable care is taken to ensure that each signatory can be identified and their intention to execute the document on behalf of the company is indicated.
So, how long will the Determination, and its changes be available for?
The Determination will only be in effect until 6 November 2020.
At Jenkins Legal Services, we specialize in business, property, and estate planning law. If you have any questions or you would like to speak with any member of the Jenkins Legal team, please do not hesitate to contact the office.
This article is not legal advice and the views and comments are of a general nature only. This article is not to be relied upon in substitution for detailed legal advice.