In a step that goes a long way to modernising meetings for companies and registered schemes, the Commonwealth Parliament has passed the Corporations Amendment (Meetings and Documents) Act 2022 (Cth) (Meetings and Documents Act) to enable hybrid and virtual meetings and the sending of meeting-related documents electronically.
The amendments have been welcomed by businesses and individuals alike, enabling greater certainty and flexibility for organisations to adopt the best meeting format for their circumstances, whether that be physical, hybrid or wholly virtual, as well as giving members the flexibility to receive meeting-related documents in their preferred format.
Below, we explore the changes in more detail, highlighting important considerations and requirements.
Hybrid and virtual meetings
The Meetings and Documents Act amends sections 249R and 252P of the Corporations Act 2001 (Cth) (Corporations Act), providing companies and registered schemes with the option to hold a meeting of members:
- at one or more physical locations and using technology to allow persons to attend virtually (a hybrid meeting); or
- using technology only (a virtual meeting) if this is expressly required or permitted by the company's or scheme's constitution.
The new meeting options are in addition to the historical options of holding a meeting at one or more physical locations (a physical meeting).
These amendments do not override any requirements set out in a company's or registered scheme's constitution regarding the holding of meetings. It is likely these entities will need to seek shareholder approval to amend their constitutions to expressly permit the holding of virtual meetings.
Irrespective of how a meeting is conducted, members must be given a reasonable opportunity to participate in the meeting.1 Specifically, entities must ensure that technology used to facilitate virtual attendance is reasonable and allows members who attend virtually to exercise, orally and in writing, any right the member may have to ask questions and make comments.2 Virtual attendance is commonly in the form of streamed video or audio conference facilities that permit members to participate effectively in that forum.
The Meetings and Documents Act also amends the Corporations Act to make clear that all persons who attend a meeting, whether at a physical venue or using technology, are taken to be present in person at the meeting.3
Distribution of meeting-related documents
The Meetings and Documents Act has inserted a new Part 1.2AA into the Corporations Act in relation to meetings and sending of documents.
Division 2 of the new Part 1.2AA specifies the types of documents that may be sent in a technology-neutral manner by a company, a responsible entity of a registered scheme or a disclosing entity.4 These include:
- a document that relates to a meeting of the members of a company or registered scheme;
- a document that relates to a resolution to be considered by the members of a company without a meeting;
- a report mentioned in s 314 of the Corporations Act, including a financial report, directors' report and auditor's report;
- a notice of members rights provided under s 110K of the Corporations Act; and
- a document prescribed by the Corporations Regulations 2001 (Cth) (Corporations Regulations).5
Any of the documents specified above may be sent to a person (the recipient):
- by sending the document in physical form; or
- if, at the time the document is sent, it is reasonable to expect that the document would be readily accessible so as to be useable for subsequent reference:
- by providing the recipient, in physical or electronic form, with sufficient details to allow the recipient to access the document electronically (e.g. by sending the recipient an email with a link to the document);
- by sending the document electronically (e.g. via email); or
- if the document is a report mentioned in s 314 of the Corporations Act or a document prescribed by the Corporations Regulations, by making the document readily available in electronic form on a website.6
However, Division 2 of the new Part 1.2AA of the Corporations Act does not apply to a document that is required or permitted under the Corporations Act to be sent to ASIC or the Registrar.7
Members' right to elect
The Meetings and Documents Act amends the Corporations Act to allow members to elect to receive documents in physical form or electronically,8 and to elect not to be sent a report mentioned in s 314 of the Corporations Act or a document prescribed by the Corporations Regulations.9 A failure to comply with a member's election is a strict liability offence.10
The Meetings and Documents Act also introduces a requirement under the Corporations Act for members of a public company, registered scheme or disclosing entity to be notified of their right to elect to receive documents electronically or in physical form, and of their right to elect not to receive documents, at least once in each financial year and for such entities to make the notice available on a website.11
The Meetings and Documents Act takes a technology-neutral approach. By not mandating the use of a specific technology, the reforms introduced by the Meetings and Documents Act gives companies the autonomy and flexibility to adopt a form of technology that is commensurate with the company's size, structure, and specific needs, and also allows for the use of technologies that may be developed in the future.
Review of the reforms
Company officers must, however, monitor the regulations for further changes. The Meetings and Documents Act was passed on the basis that an independent review of the reforms be undertaken no later than the earliest practical day after 23 February 202412 to ensure the new framework is operating as intended, and a report tabled in each House of Parliament within 15 sitting days after the report is given to the Minister.13 The changes permitting virtual meetings will cease to apply if the aforementioned requirements are not satisfied.14
For specific advice regarding how your organisation can take advantage of these reforms, including updating your organisation's constitution to expressly authorise virtual meetings, please contact Lander & Rogers' Corporate team.
Photo by Maximeutopix on Unsplash.
1 Corporations Act ss 249S and 252Q.
3 Corporations Act ss 249RA and 252PA.
4 Corporations Act s 110C(1).
5 Corporations Act s 110C(2). As at the date of this article, no document has been prescribed by the Corporations Regulations.
6 Corporations Act s 110D(1) - (3). However, Division 2 of the new Part 1.2AA of the Corporations Act does not limit the ways in which an entity may send a document.
7 Corporations Act s 110C(3).
8 Corporations Act s 110E(2).
9 Corporations Act ss 110E(4) and 110E(5).
10 Corporations Act s 110F(3) (in relation to an election to receive documents in a particular form), and s 110G(3) (in relation to an election not to receive a document).
11 Corporations Act s 110K.
12 Corporations Act s 1687J(1) - (2).
13 Corporations Act s 1687J(5).
14 Corporations Act s 1687K(1).
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