As part of its plan to secure Australia’s economic recovery, the Morrison government has today (21 October) introduced into parliament a bill to modernise the Corporations Act 2001 by permanently allowing companies to use technology to meet regulatory requirements under the legislation.
The Corporations Amendment (Meetings and Documents) Bill 2021 (the Bill) will allow companies and registered schemes to hold virtual meetings, distribute meeting‑related materials, and validly execute documents.
These reforms build on recently renewed temporary relief, which will remain in place until 31 March 2022. The temporary rules that were put in place allowed SMSF corporate trustees to sign and execute electronic documents, as well as split execution of documents, under section 127 of the Corporation Act 2001 (Cth) (Corporations Act).
“Specifically, the permanent reforms ensure that meetings can be held physically, as a hybrid or, if expressly permitted by the entity’s constitution, virtually, provided that members, as a whole, are given reasonable opportunity to participate in the meeting,” Treasurer Josh Frydenberg said.
“It will ensure that companies and registered schemes can meet their obligations to send documents in hardcopy or softcopy and give members the flexibility to receive documents in their preferred format; and allow documents including deeds to be validly executed in technology-neutral and flexible manners, including by company agents.”
These reforms will provide relief to around one million operating businesses and are estimated to deliver deregulatory savings of $450 million each year, averaged over 10 years, according to Mr Frydenberg.
They will be reviewed two years after the legislation commences to ensure that they are operating as intended.
Importantly, the Bill ensures that companies can continue to meet their obligations amid the uncertainty of the COVID‑19 pandemic.
The Morrison government will continue ensuring Australia’s regulatory settings are fit for purpose as we emerge from the pandemic, rebuild our economy, and secure Australia’s future.
