Finally, we have some certainty around electronic executions of documents by companies with the passing of the Corporations Amendment (Meetings and Documents) Bill 2021 (Cth) which is effective from 22 February 2022.
The long-awaited amendment significantly improves the ease of executing documents and holding company meetings to be more in line with the technology-based approach in doing business in the 21st century.
The main changes are:
- Split executions are now recognised as an effective method of execution.
- Sections 126 and 127 of the Corporations Act 2001 now allow for documents to be duly executed by companies in a ‘technology neutral manner’.
- A range of documents, including deeds and company meeting documents, can now be executed in a ‘technology neutral manner’ including online execution platforms.
- The issue of sole director companies with no company secretary has been addressed, companies with a sole director (and no company secretary) may now execute documents under the statutory framework of the Corporations Act 2001.
- Company meetings can now be held in a hybrid video and physical format. However, wholly video meetings can only be held if it is expressly permitted by a company’s constitution.
- ASIC and other regulatory authorities will now be required to accept executions made pursuant to the amendments to the Corporations Act 2001 under the Bill.
- A full explanation can be viewed here.
The Bill is a welcome relief to company directors, shareholders and advisors in circumstances where transactional matters are increasingly conducted remotely and using technology instead of the old wet ink signature requirements of the past.
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