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Companies limited by guarantee – temporary legislation lapses

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The temporary relief granted to companies in relation to signing documents electronically and holding general meetings using technology lapsed on 21 March 2021, creating uncertainty for companies that had to adapt as a result of the COVID-19 pandemic.

The Corporations (Coronavirus Economic Response) Determination amended the Corporations Act 2001 (Cth) to enable documents to be executed under section 127 by electronic means. It also clarified the law on virtual annual general meetings.

Since the determination lapsed, ASIC has announced that it will adopt a ‘no action’ position in relation to companies convening and holding virtual meetings. However, ASIC has emphasised that it will not be adopting a ‘no action’ policy towards electronic signatures.

This means that companies can no longer execute documents under section 127 of the Corporations Act 2001 (Cth) electronically. This change increases the complexity of the legal issues surrounding the validity of documents executed by directors using electronic signatures.

For more information about the changes to the Corporations Act and electronic signatures, please contact us.

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