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In what may be a sign of things to come in other countries, Ally Law member firm Russell Kennedy reports that temporary relief measures introduced in Australia at the height of the coronavirus pandemic to facilitate electronic signing of documents and virtual annual general meetings (AGMs) have now expired.
It had been hoped that the government’s effort to pass the Treasury Laws Amendment (2021 Measures No. 1) Bill 2021 would result in an extension of the temporary measures for electronic signing of documents and virtual AGMs to 15 September 2021. Dashing these hopes, delays in the Senate approval and inquiry process have postponed debate on the bill until 3 August 2021. In the interim, the Corporations Act has reverted to its pre-COVID status.
For the time being in Australia, the old “wet-ink” methods will again be required when signing documents and AGMs will require careful planning. What does this mean for businesses?
First, the execution of company documents by electronic means will no longer satisfy the requirements of section 127 of the Corporations Act. Such electronic execution also will no longer attract the benefit of the statutory assumptions in section 129 of the Corporations Act. Further, the Australian Securities & Investments Commission has chosen against adopting a “no-action” position, since the measures regarding the electronic execution of documents do not fall under the Corporations Act obligations administered and enforced by ASIC.
The Governance Institute of Australia and other stakeholders have released guidance that describes workarounds that may satisfy the requirements of the Corporations Act. However, the most cautious response to the situation would be for companies to identify and follow procedures that enable them to execute documents with wet-ink signatures on the same static document.
Second, and somewhat more favorably for business, ASIC has adopted a no-action position with respect to virtual meetings and has provided guidance — conditioned on several factors — that companies may rely on when determining whether or not to hold a virtual AGM.
To learn more about the lapse of these temporary relief measures, their impacts on businesses, and the potential reintroduction of (possibly permanent) relief, click here to read the alert published by Ally Law member firm Russell Kennedy.
