To print this article, all you need is to be registered or login on Mondaq.com.
In the wake of the COVID-19 pandemic, many organisations are
considering whether they can hold general meetings using
technology, or if they need to instead delay upcoming meetings.
The answer to this question will vary between organisations and
depends on several factors. Whether an organisation can hold a
general meeting using technology will depend on applicable
legislation, its governing document and the approach of its
regulator.
We strongly recommend that organisations seek specific advice as
to whether they can hold an upcoming general meeting using
technology.
What does your governing document say?
An organisation’s governing document will influence whether
a general meeting can be held using technology.
If an organisation’s governing document includes a clause
expressly permitting general meetings to be held using technology,
the organisation can proceed to hold a general meeting in line with
that clause.
Alternatively, if an organisation’s governing document
explicitly disallows the use of technology for general meetings,
the organisation may need to consider postponing its meetings until
they can be held in person. Members may question the validity of
resolutions passed at general meetings that were not validly
held.
If the governing document is silent on this point, depending on
the type of organisation in question, it may be able to look to
legislation and other forms of relief to support it holding its
general meeting using technology.
Is there any COVID-19 relief available?
Companies
In response to COVID-19, the Federal Treasurer has provided
short-term regulatory relief from provisions relating to company
meetings under the Corporations Act 2001 (Cth). The
Corporations (Coronavirus Economic Response) Determination (No.
1) 2020 (Cth) enables companies to hold annual general meeting
(>AGMs>), and other meetings prescribed
under the Corporations Act, entirely electronically. The
legislative instrument commenced on 6 May 2020 and is expected to
remain in place until 21 March 2020, following a recent
announcement from the Treasurer.
Unfortunately, the Determination provides minimal relief to
companies that are registered charities. Charities registered with
the ACNC that are public companies limited by guarantee are
generally not required to hold meetings (including AGMs) in
accordance with the provisions of the Corporations Act. Section
111L of the Corporations Act sets out a complete list of the
provisions that are not applicable to registered charities.
Registered charities instead need to comply with the ACNC
Governance Standards.
In most cases, charities will not be able to use the electronic
meeting relief offered by the Determination given that their
meetings are not required to be held pursuant to the Corporations
Act. An exception applies where a charity is required to hold a
meeting under a provision of the Corporations Act and that
provision is not excluded by section 111L.
Incorporated associations
Under the Associations Incorporation Act 1981 (Qld),
incorporated associations in Queensland are usually required to
hold an AGM within six months of the end of their financial year.
However, in light of the effects of COVID-19, the Office of Fair
Trading has granted a grace period of six months from the end of an
association’s financial year to hold its AGM, without the need
to make a written application.
Further to this, the Associations Incorporation Act has recently
been amended to allow incorporated associations to hold meetings,
or permit members to take part in its meetings, by using any
technology that reasonably allows members to hear and take part in
discussions as they happen.
Available concessions for associations incorporated in other
states and territories in Australia, will depend on the regulator
for that state or territory.
Do the Australian Charities Not-for-profits Commission
Governance Standards assist charities?
Charities can take some comfort from ACNC Governance Standard 2,
which provides that charities must ‘take reasonable steps to be
accountable to their members and allow their members adequate
opportunities to raise concerns about how the charity is
run’.
Therefore, if:
- the governing document of a charity does not explicitly require
a meeting to be held in person, and - the meeting is not a type that the Corporations Act and
therefore, the COVID-19 legislation applies to,
it may be arguable that holding a meeting in the current
COVID-19 environment where members are invited to attend and
participate via some form of technology would still comply with
ACNC Governance Standard 2.
Conclusion
Governing documents and applicable legislation will differ
between organisations so unfortunately there is no ‘one size
fits all’ answer to this question.
Unsure whether your organisation is permitted to hold electronic
meetings? Contact Cooper Grace Ward for advice on this issue.
Cooper Grace Ward is a leading Australian law firm based in
Brisbane.
This publication is for information only and is not legal
advice. You should obtain advice that is specific to your
circumstances and not rely on this publication as legal advice. If
there are any issues you would like us to advise you on arising
from this publication, please contact Cooper Grace Ward
Lawyers.
