Entities now can be sure (for the next six months at least) that holding a ‘virtual’ meeting of members will not contravene the Corporations Act 2001, the Corporations Regulations 2001, the Insolvency Practice rules or the Passport Rules. This clarity was provided when Federal Treasurer Josh Frydenberg issued the Corporations (Coronavirus Economic Response) Determination No. 1 2020 (Determination) on 5 May 2020.
The Determination will be in effect for six months (until 5 November 2020) and provides further assurance on the validity of ‘virtual’ meetings (that is, a meeting held online instead of at a physical location), following ASIC’s recent ‘no action’ position – 20-068MR – Guidelines for meeting upcoming AGM and financial reporting requirements. The Determination reflects the flexible approach that regulators have taken to compliance with obligations that might otherwise prove difficult during the COVID-19 crisis.
The Determination stipulates that entities, such as companies and responsible entities of managed investment schemes, which are required or want to hold a meeting (such as an annual general meeting or a meeting of the scheme’s members) may do so using one or more technologies that give all persons entitled to attend a reasonable opportunity to participate without being physically present in the same place. This will give companies and other entities the confidence that meetings that are held online will be validly held.
Entities will need to ensure they plan and conduct these virtual meetings in accordance with the following conditions as stated in the Determination:
- When preparing a notice to hold a virtual general meeting, the notice provided to members must include information about how those entitled to attend can participate (including how they can participate in a vote taken in the meeting and speak, if they are entitled to do so). If a proxy may be appointed using technology, the notice of meeting must specify the technology that can be used to make this appointment.
- Notice of a meeting can be sent to recipients using technology, including via email. Where recipients have not provided the entity or its registry with an email address, the entity may meet its notice requirements by sending physical correspondence to members (such as a letter or ‘postcard’) which sets out how the recipient can view the information online through a URL link. This may not be a significant change for some entities that already provide notices of meeting in electronic format to members who have not otherwise elected to receive a hard copy.
- If a notice of meeting was sent to members before the date the Determination came into force (5 May 2020) and it is proposed that the meeting be held virtually, a new or supplementary notice must be issued at least seven days before the meeting is held, containing information about how to participate electronically.
Conduct of the meeting
- When conducting a virtual meeting, an entity will need to ensure all voting is conducted by poll and each person must be given the opportunity to vote in real time or, if practicable, ahead of the meeting.
- A quorum may be met through the use of technology and all persons participating in the meeting virtually will be taken to be present at the meeting.
- A proxy appointed through the use of technology and in attendance at the meeting must be treated in the same manner as if the person appointed was attending a physical meeting and entitled to vote.
Hall & Wilcox has extensive experience in advising listed and non-listed entities, and responsible entities of registered schemes, on all aspects of their meeting requirements under the Corporations Act and the constitutions of the entities or funds. If you or your clients require assistance with planning and conducting a virtual meeting, please contact us.
The article was prepared with the assistance of Vanessa Murphy.
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