On 22 February 2022, the Corporations Amendment (Meetings and Documents) Act 2022 (Cth) (Act) received royal assent. The Act amends the Corporations Act 2001 (Cth) (Corporations Act), giving rise to changes affecting company meetings, communications and document execution. In particular, sole directors of proprietary companies should take note of the following two key changes concerning signing company documents

For documents executed from 23 February 2022:

1. (Sole director can sign company documents (including deeds) – even if not a company secretary): The passing of the Act allows Australian proprietary companies with a sole director and no company secretary to validly sign and execute documents (including deeds if the document is expressed to be executed as a deed) on behalf of the company under section 127 of the Corporations Act, without having to appoint themselves as the company secretary as well;

and

2. (Assumptions): A party signing a document with an Australian  proprietary company, signed by its sole director, can rely on the statutory assumptions set out in section 129 of the Corporations Act:
   1. That the document has been duly executed by the company, and the company is thus bound, if the document appears to have been signed by the company in accordance with section 127 of the Corporations Act and
   2. If any person who signs the document states next to their signature that they are the sole director, that is the case.

Other changes introduced by the Act

A range of other significant changes for companies were introduced, as summarised:

1. Signing and executing documents:
   1. Electronic signing:  Certain documents (including agreements, deeds and resolutions) can be signed electronically wholly or partly electronically and physically.
   2. Agency: Agents can execute documents, including deeds, on behalf of the company.

2. Meetings and sending documents:
   1. Virtual members meetings: Members’ meetings can be held virtually, online (if certain requirements are met). In whichever forum the members’ meeting is held, members should be given the reasonable opportunity to participate. 
   2. Virtual board meetings: A directors’ meeting can be called or held using technology.
   3. Sending documents electronically: The company can send certain documents to its members electronically. Members can elect to receive documents in physical or electronic form.

These are explained in more detail below:

Electronic signing

The Act has introduced part 1.2AA into the Corporations Act. These provisions allow for the electronic signing of documents by or on behalf of a company from 23 February 2022, which includes the following documents:

• Contracts or deeds
• Documents relating to a meeting of members of a company
• Documents relating to a meeting of directors (or a committee of directors) and
• Written resolutions of directors or members of a company (that do not require a meeting).

Agency

The Act has amended section 126 of the Corporation Act to provide that an agent acting with the company’s express or implied authority may make, vary, ratify or discharge a contract, or execute a document, including a deed, from 23 February 2022 on behalf of the company. The agent does not need to be appointed by deed to be able to do so.

Virtual members meetings

The Act amends sections 249R and 252P of the Corporations Act, allowing companies to hold meetings for members virtually. Companies may convene:

• Hybrid meetings: meetings held at one or more physical locations as well as and using technology to allow persons to attend virtually or
• Virtual meetings: using technology only if this is expressly required or permitted by the company's constitution.

Reasonable opportunity for members

The Act also amends section 249S and introduces section 252Q to provide that members must be given a reasonable opportunity to participate in a company meeting.

Some of the requirements that apply include:

• The meeting must be held at a reasonable time.
• If virtual meeting technology is used, the technology must be reasonable and allow members who attend the meeting using the technology, as a whole, to exercise orally and in writing their rights to ask questions and make comments.
• If the meeting is held at a physical location, it must be reasonable to have it at that location.
• If the meeting is held in more than one physical location (whether or not it is also held using virtual meeting technology), it must be reasonable to hold the meeting at the primary physical location.
• If the meeting is held in more than one physical location (whether or not it is also held using virtual meeting technology), the technology used to hold the meeting at more than one physical location must be reasonable.  

Review of the Act

An independent panel (Panel) published a final report with the outcomes of the Statutory Review of the Meetings and Documents Amendments (Review), tabled in both houses of Parliament on 9 September 2024.

As the tabling of the Review satisfies the requirements under the Act, the changes that permit virtual meetings for members (sections 249R(c) and 252P(c) of the Act, as explained above) will continue to apply. 

The Government must consider the Review and table its response to any of the Panel’s recommendations in each House of Parliament no later than the first sitting day of that House, occurring three months or more after the day the Review is first tabled in either House of Parliament.

Virtual board meetings

For board meetings held from 1 April 2022, any technology agreed to by all the directors may be used. The consent may be a standing one. A director may only withdraw consent within a reasonable period before the meeting.

Sending documents electronically

As part of the newly introduced part 1.2AA into the Corporations Act, the provisions outline specific types of documents that may be sent electronically by a company only if, when the document is sent, it is reasonable to expect the document to be readily accessible to use for subsequent reference.

The following types of documents may be sent electronically from 1 April 2022:

• Documents and or materials relating to a meeting of members
• Documents and or materials relating to a written circulating resolution to be considered by the members of a company (without a meeting)
• Reports outlined in section 314 of the Corporations Act, e.g. financial report, directors’ report, auditor’s report
• Notice of members right under section 110K of the Corporations Act.

These specified documents may be sent via the following electronic methods:

• Providing the recipient, in physical or electronic form, with sufficient information to allow the recipient to access the document electronically (e.g. sending an email with a link to the document)
• Sending the document electronically (e.g. via email) or
• If the document is a report mentioned in section 314 of the Corporations Act, by making the document readily available in electronic form on a website.

Members’ election

From 1 April 2022, members are also allowed to make an election to receive documents either physically or electronically or not to be sent any of the reports listed in section 314 of the Corporations Act in new part 1.2AA of the Corporations Act.

The company must comply with a member’s election to receive documents in the chosen form, not receive certain documents, or be in breach of a strict liability offence.

ASIC Review

On 12 July 2024, ASIC issued a reminder that companies can hold virtual-only meetings of members if their constitution expressly requires or permits it, in accordance with the amendments to the Act discussed above.

Relevantly, from 1 July 2022 to 31 December 2023, ASIC reviewed 643 notices of meetings of public companies. ASIC noted that a small proportion (14%) of companies held wholly virtual meetings. Some of these companies, however, did not have constitutions that expressly required or permitted virtual-only meetings. ASIC wrote to these companies to remind them of their obligations under the amendments to the Act.

As the multi-faceted reforms are now in place, these technological mechanisms affecting members and directors must be understood so that they can be used to facilitate access and simplify corporate secretarial processes.

If you have any questions about the information in this article, please do not hesitate to contact Danny Adno or Ann Kwak or speak with a member of our Business, Corporate & Commercial Team.