In response to the impacts of Covid-19, temporary measures were introduced to allow companies to electronically sign some documents under the Corporations Act 2001 (Cth) in May 2020. Over the past 2 years, the Federal Government has passed several pieces of legislation to temporarily extend these mechanisms for electronic execution of certain documents under the Corporations Act, before finally establishing a permanent statutory mechanism for electronic execution in February 2022.
The most recent step in the government’s efforts to modernise company communication and document execution method is the introduction of the Treasury Laws Amendment (Modernising Business Communications and Other Measures) Bill 2022 (Cth) to parliament on 23 November 2022.
The key changes this Bill will make to the Corporations Act include:
- allowing for all documents regulated under the Corporations Act to be signed electronically;
- most documents regulated under the Corporations Act will be able to be sent electronically, save for where the recipient elects to receive a physical copy, where documents are required to be sent to ASIC or where documents are related to corporate fundraising or financial services;
- allowing for the electronic delivery of documents targeting security holders in relation to takeovers and compulsory acquisitions;
- meetings of directors will be able to be held or called using any reasonable technology regardless of whether the company’s directors have consented to virtual meetings; and
- where a company knows that a member’s contact details are incorrect, they will no longer be required to send documents to that member at those contact details. However, the company must attempt to continue to contact the member for a period of 6 to 18 months once it stops sending documents.
Where documents can be sent electronically, the existing provisions of the Corporations Act will still require that:
- a document be able to be sent physically or electronically by providing sufficient information to the recipient to allow them to access the document electronically;
- company shareholders and members be able to elect to receive physical or electronic copies of documents; and
- annual reports be made available to members on a website.
The Bill is currently in infancy, having been referred to the Senate Economics Legislation Committee for consideration and will likely not make its way through Parliament until early-mid 2023.
If you have any specific queries regarding electronic signing and how the Bill may impact you or your business, don’t hesitate to reach out to KKI’s Commercial Team.