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31 May 2020

Corporations Act adapts to COVID-19 social distancing


3 min

Zoom to the future!

COVID-19 has had a major impact on the way companies and business operate. One positive outcome in response to the crisis is the use of emergency powers by the Treasurer to modify certain provisions in the Corporations Act 2001.

The Corporations (Coronavirus Economic Response) Determination (No.1) 2020 (the Determination) came into effect on 6 May 2020 and is in place for six months. The changes provide the mechanism for using technology for meetings and executing company documents.

Although the changes are due to expire on 6 November 2020, there is no reason why the changes should not be permanent. Technology is moving at a greater pace than the law and the COVID-19 response shows we can adapt and make beneficial changes to how the Corporations Act operates.Video Conferencing


The Determination modified any Corporation Act provision (or its Regulations) that requires or permits a meeting to be held, deals with giving a notice of a meeting, and regarding meeting conduct. Companies that are required to hold meetings can now hold those remotely as virtual meetings.  However, a show of hands is not permitted despite technology allowing video functionality. Rather, votes must be taken by an online poll and each person entitled to vote must be given the opportunity to vote in real time and if practical—ahead of the meeting.

The Corporations Act usually requires notices to be sent by post. The Determination has now modified the Act to enable notices to be sent using technology. Companies can also send a letter setting out where the recipient can view the information online and download the documents for the meeting.

The meeting notice must include information about how attendees can participate in the meeting, including by proxy attendees, and how participants can vote and ask questions.

BlueJeans, Facebook, Microsoft Teams, Viber, WhatsApp, and Zoom (for example) are now able to be used to facilitate meetings. Given the extensive versality of these platforms being on phones (iPhone, Android), tablets, and computers this gives greater flexibility in how, when and where we attend all meetings.

Executing company documents

Section 127 of the Corporations Act has been modified for companies, directors, secretaries and any persons that have dealings with companies, to allow the execution of a document in electronic form. A company may now execute a document without a common seal if each person required to sign the document on behalf of the company either:

  1. signs a copy or counterpart of the document in physical form

  2. uses electronic communication that reliably identifies the person and indicates the person’s intention about the document’s contents.

Documents can now be executed by:

  • Pasting a copy of a signature into a document.

  • Signing a PDF using a Stylus or by finger.

  • Using cloud-based software like DocuSign.

  • Using voice communication that can reliably identify the person.

The above changes show that out of the restrictions to our daily lives some positives can be achieved. COVID-19 has shown that when forced to, changes can be made to the Corporations Act and legislation overall to make it more flexible, practical and keep its pace with technology advancements. Afterall, technology is supposed to make our lives easier and more efficient.

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