COVID-19: ASIC extends time to hold wholly virtual meetings

3 minute read 03.03.2022 Kate Hilder, Siobhan Doherty

ASIC has exercised its new emergency powers to extend the time in which entities will have the option to hold wholly virtual meetings. We outline the changes and explain how they fit in with recent reforms.

Key takeouts

Under temporary changes to the Corporations Act 2001 (Cth) (Corporations Act) introduced by the Treasury Laws Amendment (2021 Measures No 1) Act 2021 (TLA 1 Act) companies have the option to hold wholly virtual or hybrid meetings until 31 March 2022.
Under permanent changes introduced by the Corporations Amendment (Meetings and Documents) Act 2022, from 1 April 2022, companies will have the option to hold hybrid meetings, but will only have the option to hold wholly virtual meetings if expressly permitted/required to do so under their constitutions.
Extension of time: Under ASIC Corporations (Virtual-only Meetings) Instrument 2022/129: all listed companies and listed and unlisted registered schemes will continue to have the option to hold virtual-only meetings until 31 May 2022, unlisted companies, will continue to have the option to hold virtual only meetings until 30 June 2022.

Overview: What's changed and why?

Following consultation with stakeholders, and in light of the ongoing uncertainty caused by the COVID-19 pandemic, the Australian Securities and Investments Commission (ASIC) has exercised its emergency powers under section 253TA of the Treasury Laws Amendment (2021 Measures No 1) Act 2021, to grant companies, and listed and unlisted registered schemes, additional time to hold wholly virtual meetings, where the directors of those entities consider it necessary.

Extension of time to hold wholly virtual meetings

Under ASIC Corporations (Virtual-only Meetings) Instrument 2022/129:

all listed companies and listed and unlisted registered schemes will have an additional two months (ie the period from 1 April 2022, when changes introduced by the Corporations Amendment (Meetings and Documents) Act 2022 would otherwise apply, to 31 May 2022), in which they will have the option to hold a wholly virtual meeting.
all unlisted companies will have an additional three months (ie the period from 1 April 2022 to 30 June 2022) in which they will have the option to hold a wholly virtual meeting.

Importantly, in order to rely on this relief, the directors of the entity will need to pass a directors' resolution that they consider it would be 'unreasonable' to hold a physical or hybrid meeting due to the pandemic (eg due to COVID-19 pandemic restrictions or 'concerns related to the pandemic').

The relief applies even if entities are not expressly required/permitted to hold wholly virtual meetings under their constitutions.

ASIC Commissioner Sean Hughes said that it is intended to enable entities to 'flexibly plan for pandemic conditions' and respond quickly to changing conditions should it be necessary.