As a result of the Corona Virus Outbreak (COVID-19) and social isolation restrictions, many organisations are finding it impossible hold their AGM. For companies with a financial year end of 31 December, AGMs are generally required to be held by 31 May.
However, the Australian Securities and Investments Commission (ASIC) has relaxed this requirement. ASIC has stated that they will not take any action against companies that delay their AGMs by up to two further months, until the end of July. This means that ASIC will not be pursuing offences for breaches of the requirement under the Corporations Act 2001 (Cth). They have also endorsed the use of AGMs to be held through alternate means.
As for financial reporting obligations, no changes by ASIC have been made. Therefore, requirements for meeting full-year and half-year financial reporting obligations remain in place.
Can a virtual AGM be held?
While technology may appear to be the saving grace, holding an AGM via web conferencing may not be the answer. It is important that the Company’s Constitution allows for such action. Additionally, members must be afforded a reasonable opportunity to participate in the meeting. Members must be able to ask questions and be able to vote by poll (in lieu of hands). Accordingly, videoconferencing may not be suitable or practicable for all organisations.
Can a hybrid AGM be held?
Yes, an AGM comprising both a physical and virtual location is permitted by ASIC, subject to the terms of the company’s Constitution.
What other options exist?
Members may be able to vote by proxy, rather than in person. The AGM meeting notice will usually specify whether proxy votes are allowed. This can be a good option for those that cannot attend the AGM in either virtual or physical form.
Please do not hesitate to contact Griffin Legal for advice in relation to these new changes and proposed AGM formats.