As a result of the COVID-19 pandemic, various temporary measures were put in place allowing the electronic signing of documents by companies and the holding of virtual meetings. The application period of such temporary measures has been continually extended, and was due to expire on 31 March 2022. By virtue of the Corporations Amendment (Meetings and Documents) Act 2022 (Cth), the temporary measures have now been enshrined in the Corporations Act 2001 (Cth) (Corporations Act), meaning that a permanent mechanism now exists to allow hybrid (in person and remote) meetings and the use of technology to sign and share company- and meeting-related documents.
As a result of the amendments, the Corporations Act now permits a person to sign documents (including deeds) on behalf of a company under both section 126 (i.e. as an agent on behalf of the company) and section 127 (i.e. in their capacity as director or company secretary) by “signing an electronic form of the document using electronic means.”
The electronic means used to sign the document must:
- identify the person and indicate the person’s intention in respect of the information recorded in the document; and
- be either:
- as reliable as appropriate for the purpose for which the information was recorded, in light of all the circumstances, including any relevant agreement; or
- proven in fact to have fulfilled the functions described in paragraph 1. above, by itself or together with further evidence.
The Corporations Act also now clarifies that people signing documents do not need to sign the same form or page as other signatories or all use the same method of signing. For example. a company may execute a document by one director signing a physical form of the document by hand, and another director signing an electronic form of the document by electronic means.
It is also not necessary that all information included in a document be included in the form of document signed. For example, a party may only sign the signature page of the relevant document separate to the remainder of the document.
A person may also sign a document in different capacities using only one signature, provided that the document permits the person to do so and states the capacities in which they are signing. For example, if a signature block in a document requires or permits a person to sign once on behalf of 2 companies as an agent for both those companies, the person may sign the document as an agent for both those companies by signing that signature block.
Hybrid meetings and sending of meeting documents
The Corporations Act also now provides that documents relating to shareholders meetings or resolutions to be considered may be sent to company shareholders using electronic means, provided that the relevant shareholder has elected to receive such documents electronically.
Shareholders’ meetings may now be held:
- at one or more physical venues; or
- at one or more physical venues and using virtual meeting technology; or
- using virtual meeting technology only, if this is required or permitted by the company’s constitution expressly.
Accordingly, a shareholders’ meeting may only be completely virtual if allowed by the constitution of the relevant company. Otherwise, the meeting will need to be a ‘hybrid’ meeting and take place both physically and using virtual meeting technology.
It is important to note that proposed resolutions of listed companies which are notified to shareholders in a notice of meeting must now be decided by poll. Such resolutions are unable to be determined by a show of hands.
Resolutions of shareholders and directors may also be signed in accordance with the new rules governing the electronic signing of documents.
If you have any questions or concerns related to the electronic distribution or signing of documents, please do not hesitate to contact us.