Changes to convening and holding creditor’s meetings
Corporations (Coronavirus Economic Response Determination) No. 1 2020
On 5 May 2020, Treasurer Josh Frydenberg announced changes to the Corporations Act 2001 (Cth) (Corporations Act) and related legislation that allows for companies to have entirely virtual meetings and to issue electronic notice of meetings. The changes have been made to give companies, responsible entities, external administrators and other classes of people governed by the Corporations Act certainty about how they can meet their legal obligations whilst abiding by social distancing measures for the next six months.
The Corporations (Coronavirus Economic Response) Determination (No. 1) 2020 (Determination) modifies provisions of the Corporations Act, the Corporations Regulations 2001 (Cth), the Insolvency Practice Rules (Corporations) 2016 (Cth) and the Corporations (Passport) Rules 2018 (Cth) that deal with how meetings are held and how notice of meetings are given. It also affects any clauses in the constitution of a company or registered scheme which deals with these things.
The Determination makes the following changes, effective from 6 May 2020 to 5 November 2020.
Meetings
- A creditor’s meeting may be held using ‘one or more technologies’ to allow individuals to attend a meeting without being physically present.
- All individuals participating in a meeting are taken to be present if participating using such technologies.
- A vote taken at the meeting must be taken on a poll, and not a show of hands.
- Each individual at a meeting must be given an opportunity to speak and ask questions.
- A proxy may be appointed for virtual meetings.
Notice of Meetings
- A notice of a meeting may be given use ‘one or more technologies’ to communicate to individuals the contents of the notice, other material relating to the meeting, or providing a link to where the notice can be viewed or downloaded.
- A notice which advises individuals that a virtual meeting will be held must communicate how they can participate in the meeting, including how they can vote and speak at the meeting.
- For notices given before the commencement of the Determination, the person giving the notice must give a fresh notice of meeting at least 7 days before the meeting is held, which sets out how individuals can vote and speak at the electronic meeting.
This publication covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. It is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this publication.
