Amendments to AGM and reporting deadlines, 2020
While we are continuing to see the COVID-19 regulations and restrictions ease, there are still very firm requirements for holding large gatherings of people. This has implications for public companies and Incorporated Associations who are due to hold their Annual General Meetings (AGM).
IMPLICATIONS FOR PUBLIC COMPANIES
A determination has been issued by the Treasurer, Josh Frydenberg, amending the Corporations Act for six months from 6 May 2020. The determination allows AGMs to be held using virtual technology, where that gives all persons entitled to attend the meeting a reasonable opportunity to participate.
The modifications extend to provisions of the Corporations Act that give effect to company constitutions. Amongst other points, the determination:
- deems people participating in the meeting through virtual technology to be present at the meeting;
- requires the virtual technology to give everyone a reasonable opportunity to speak at the meeting; and
- allows notice of meetings to be provided in an electronic form.
For public companies with 31 December 2019 to 7 July 2020 year ends, ASIC will not take action if the AGM is held up to seven months after year end.
The reporting deadlines for listed and unlisted companies is to be extended by one month. This is to assist entities where reporting processes have been impacted by remote work arrangements, travel restrictions and other impacts of COVID-19.
ASIC encourages entities to lodge within normal statutory deadlines where possible, with consideration of information needs of shareholders, creditors and other users of the financial report, or to meet borrowing covenants or other obligations.
Association AGMs are regulated through their constitution or rules. If an association opts to delay an AGM the committee should undertake the following:
- discuss the likely delay and the constitution or rule requirements with members;
- consider the option of an electronic AGM (eg Skype or Zoom);
- complete the annual return form to ensure information is kept up-to-date;
- ensure the lodgement fee is paid to maintain registration for the association;
- consider whether a Special General Meeting (SGM) is required at a later date to deal with any outstanding matters;
- remember that passing a special resolution requires 75% of the members present in person at the meeting to agree.