Cth Draft Bill for Use of Tech to Hold Meetings and Sign Documents Re-Released for Further Consultation
The Treasury Laws Amendment (Measures for Consultation) Bill 2021: Use of technology for meetings and related amendments (Cth) (the "Draft Bill") proposes to amend the Corporations Act 2001 (the "Act") by creating a permanent statutory mechanism for the electronic execution of company documents.
The Draft Bill also proposes amendments to allow companies and registered schemes to:
- sign and provide meetings-related documents electronically; and
- use technology to hold meetings, including hybrid meetings on a permanent basis.
This Draft Bill was first released on 25 June 2021, and was released again for further consultation. The previous version of the Draft Bill was also discussed in an earlier TimeBase article.
Background to the Draft Legislation
Schedule 1 to the Treasury Laws Amendment (2021 Measures No.1) Act 2021, which commenced on 14 August 2021, allows companies and registered schemes to hold meetings virtually and sign documents electronically until 31 March 2022. This was implemented as part of emergency measures in light of the COVID-19 pandemic.
On 17 February 2021, the Federal Government announced its intention to make these changes permanent and further announced that it would conduct a 12-month review. This Draft Bill seeks to make the changes to the Act which give effect to the Government's announcement.
The Draft Explanatory Memorandum, noted that the Draft Bill:
Overview of Draft Legislation
The Draft Explanatory Memorandum summarises that:
"The [Draft] Bill allows certain documents to be signed in flexible and technology neutral manners. This change applies to:
- the signing of certain documents (including deeds) by or on behalf of a company; and
- the signing of documents which relate to certain corporate meetings or resolutions."
he Draft Bill also seeks to make amendments that would extend the statutory document
execution mechanisms to proprietary companies with a sole director and
no company secretary. The Draft Bill also contains proposed amendments to allow companies and registered schemes to hold physical and hybrid meetings. Meetings that are wholly virtual meetings may also be used if they are expressly required or permitted by the constitution of company.
The Draft Bill also proposes that all meetings, regardless of how they are held, must give the members as a whole a reasonable opportunity to participate. Such reasonable participation includes:
- holding the meeting at a reasonable time and place;
- using reasonable technology to conduct a virtual meeting and connect different physical locations together; and
- documents relating to meetings may be signed and given using electronic means, regardless of whether the meeting is a virtual, physical or hybrid meeting.
The Draft Bill's amendments also propose to allow a member or group of members with at least five percent of the voting power to require a listed company or registered scheme to appoint an independent person to observe or report on a poll.
Submissions on the Draft Bill and the explanatory materials are now closed.
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[Draft] Treasury Laws Amendment (Measures for Consultation) Bill 2021: Use of technology for meetings and related amendments Bill (Cth) and additional explanatory materials available from TimeBase's LawOne Service