Coronavirus (COVID-19) may temporarily impact on companies’ ability to hold an annual general meeting (AGM).
This issue is most immediately relevant for listed and unlisted public companies with 31 December balance dates that are required to hold an AGM by 31 May 2020.For these entities, ASIC:
• Confirms it will take no action if the AGMs are postponed for two months; that is , until the end of July
• Supports the holding of AGMs using appropriate technology.
Two-month extension by ‘no-action’ position
ASIC has adopted a two-month ‘no-action’ position for entities with a financial year end of 31 December 2019 that do not hold their AGM by 31 May 2020. At present, these entities ideally will be able to hold their AGM by the end of July 2020, but the situation will remain under review.
Hybrid and Virtual AGMs
Some entities may wish to proceed with holding their AGM by 31 May 2020 or during the extension period, using technology to comply with COVID-19 restrictions. This may include a ‘hybrid’ AGM (where there is a physical location and online facilities) or a ‘virtual’ AGM that is conducted solely online.
Legal status of hybrid and virtual AGMs
ASIC considers that hybrid AGMs are permitted under the Corporations Act but entities need to check whether their constitution restricts meetings being held in this way. ASIC does not have the power to modify the Corporations Act to facilitate virtual AGMs. However, we have provided a no-action position on virtual AGMs.
No-action on sending supplementary notices electronically
ASIC also intends to take no action on any contravention of the Corporations Act if an entity has dispatched a notice for a meeting to be held on or before 31 May 2020 and at least two business days before the meeting is held, the entity sends members supplementary instructions for on-line participation by:
• electronic message (if the member has provided the relevant details)
• a notice on the entity’s website
• and a market announcement if the entity is listed on a market.
This ‘no-action’ position covers any failure of the supplementary instructions to comply with sections 249J of the Corporations Act.
(Disclaimer : This message is for general awareness please seek specific advice meeting your own circumstance -Source ASIC General Correspondence )