EXPIRATION OF COVID-19 PROVISIONS ALLOWING VIRTUAL COMPANY MEETINGS AND ELECTRONIC SIGNATURES
On 21 March 2021, the various measures introduced by the Federal Government permitting virtual company meetings and electronic signatures on company documents expired. The Treasury Laws Amendment (2021 Measures No. 1) Bill 2021 (the ‘Bill’) will extend the interim measures relating to virtual company meetings and the execution of documents, but it has not yet passed the Senate. This means in the meantime, the rules revert to their pre-COVID-19 state. The current status of the legislation is outlined below.
Company Meetings
Prior to the Covid-19 measures,[1] the Corporations Act 2001 (the ‘Act’) required aspects of company meetings to be conducted in person, for instance:
company meetings are to be held at a physical location (s 249S);
a vote is to be done by way of a show of hands (s 250J(1)); and
requirements of quorum satisfied by those personally present (s 249T).
The amended position, allowed meetings to be held virtually, which meant:
meetings could be held using one or more technologies to enable member participation;
a vote was to be done by a poll and not by a show of hands;
those virtually present are treated as present for the purposes of quorum.
The expiration of these provisions means that the rules prior to COVID are in place until the passing of the Bill. However, ASIC has adopted a ‘no action’ policy in the interim period. On 29 March 2021 ASIC announced the ‘no-action’ policy would remain in place until either the Bill passed the Senate or 31 October 2021, whichever is the earlier.[2]
Execution of documents by a corporation
Prior to the Covid-19 measures, the Act required:
the execution of a company document to occur by all persons signing the same hard copy document (s 127); and
minutes of meetings to be kept in hard copy (s 251).
The temporary COVID-19 measures permitted:
execution of company documents by each person signing a counterpart of the document;
electronic witnessing of company seals affixed to a document;
documents relating to a meeting to be signed electronically by using a method to identify the signatory and identify the signatories intention; and
minutes to be taken electronically and the minute book to be provided to shareholders and members electronically.
These provisions also expired on 21 March 2021 and until the Bill is passed, documents need to be executed in accordance with the provisions of the Corporations Act 2001. ASIC has not adopted a no action policy in the interim period. This has important ramifications for companies seeking to execute documents under s.127 of the Corporations Act after 21 March 2021. Until the passing of the Bill the use of electronic signatures is not permitted for executions relying on the Corporations Act.
Witnessing of documents
The following table summarises the requirements in each State for witnessing documents:
New South Wales
Legislation introduced during the COVID-19 pandemic addressed limitations on the physical observance of signatures.[3] These temporary regulations allowed for the witnessing of signatures and attestation of documents by audio visual link.[4]
These measures were originally due to expire on 26 March 2021 but have been extended until 1 January 2022.[5]
Victoria
The Electronic Transactions Act 2000 (Vic) has been amended to allow for electronic signatures and witnessing by audio visual link.[6] Deeds and mortgages may also be signed electronically.
In contrast to NSW, these measures are permanent.
Queensland
Legislation introduced in response to COVID-19 allowed for electronic signature of Deeds, without witnesses and without the consent of any other person.[7] Documents may also be witnessed through audio visual link, if the witness is a certified witness.
These measures are due to expire on 30 April 2021 but a proposed new Bill will extend the expiry date to 30 September 2021.[8]
Australian Capital Territory
Under the COVID-19 Emergency Response Act 2020 (ACT) the witnessing and attestation of certain documents such as the swearing and affirming of an affidavit may be done via audio visual link. The Act is set to expire three months after the declaration of COVID-19 as an emergency is withdrawn.
There are currently no further proposed bills.
Western Australia
Legislators in Western Australia introduced new measures to allow the witnessing of documents to be done by audio-visual link, but only for prescribed enactments.[9]
That scheme is currently scheduled to expire on 31 December 2021 and there are currently no further proposed bills.
Tasmania
Legislation introduced by the Tasmanian parliament [10] and declarations of the Tasmanian Premier, were passed in response to Covid-19 to authorise the swearing, signing or witnessing of any document – including affidavits and declarations – by audio-visual link.
The measures are to set expire on 8 June 2021. There are currently no further proposed bills.
South Australia & The Northern Territory: COVID-19 measures introduced by South Australia and the Northern Territory have not addressed the witnessing of documents, nor are there any relevant bills currently being proposed.
[1] Corporations (Coronavirus Economic Response Determination (No 3) 2020.
[2] https://asic.gov.au/about-asic/news-centre/find-a-media-release/2021-releases/21-061mr-asic-adopts-no-action-position-and-re-issues-guidelines-for-virtual-meetings/
[3] Electronic Transactions Amendment (COVID-19 Witnessing of Documents) Regulation 2020.
[4] Electronic signing of Deeds is already permitted in NSW under s 38A of the Conveyancing Act 1919 (NSW).
[5] Stronger Communities Legislation Amendment (Courts and Civil) Act 2020 (NSW); and Electronic Transactions Act 2000 (NSW).
[6] Justice Legislation Amendment (System Enhancements and Other Matters) Act 2021.
[7] Justice Legislation (COVID-19 Emergency Response – Documents and Oaths) Regulation 2020 (QLD).
[8] COVID-19 Emergency Response and Other Legislation Amendment Bill 2021 (QLD).
[9] COVID-19 Response and Economic Recovery Omnibus Act 2020 (WA).
[10] COVID-19 Disease Emergency (Miscellaneous Provisions) Act 2020 (Tas).