Permanent changes to annual general meetings and electronic communications
Companies will now be able to use technology to meet regulatory requirements under new legislation introduced into Federal Parliament on Wednesday (20 October).
The Morrison government tabled amendments to modernise the Corporations Act 2001 to allow companies and registered schemes to hold virtual meetings, distribute meeting‑related materials and validly execute documents. These reforms build on recently renewed temporary relief, which will remain in place until 31 March 2022.
The permanent reforms will specifically ensure that meetings can be held physically, as a hybrid or, if expressly permitted by the entity’s constitution, virtually, provided that members, as a whole, are given reasonable opportunity to participate in the meeting.
Additionally, companies and registered schemes can meet their obligations to send documents in hard copy or soft copy and give members the flexibility to receive documents in their preferred format; and allow documents including deeds to be validly executed in technology-neutral and flexible manners, including by company agents.
These reforms are aimed to provide relief to around 1 million operating businesses and are estimated to deliver deregulatory savings of $450 million each year, averaged over 10 years. They will be reviewed two years after the legislation commences, to ensure that they are operating as intended.
Importantly, the bill ensures that companies can continue to meet their obligations amid the uncertainty of the COVID-19 pandemic.