Proposed changes to company meeting notices

The Commonwealth Government has released a proposal paper entitled ‘Technology neutrality in distributing company meeting notices and materials‘ for public consultation.

The Corporations Act currently provides that all companies must give notice of meetings (including annual general meetings and other general meetings) to shareholders personally or by sending notice by post, unless an individual shareholder elects (“opts in”) to receive the notices by electronic means, or the company has amended its constitution to stipulate an alternative method of notice.

At the same time that a company sends out the notice for the meeting, it is ordinary practice for the company to also send out materials on issues to be raised at the meeting, as well as proxy appointment forms.

The Government proposes to amend the Corporations Act to permit the use of technology by not prescribing the mode of distributing meeting notices and materials.

The proposed default methods of notice
The key feature of the proposal is that a company will be able to meet the requirement to notify members of a meeting (and to make available meeting materials) by using one or more of the following methods:

  • any universally or near-universally accepted channel as a default method (Method A: eg mail or mobile phone);
  • an alternative method of communication with the consent of the shareholders (Method B);
  • an alternative method of communication provided it is effective, unless a member nominates to receive the notice by a universally or near universally accepted channel, or via a method that the member has previously consented to (Method C).

A company may adopt Method C provided that the notification offers shareholders an ability to ‘opt out’ and instead receive the notice of meeting via a channel covered by Methods A or B.

Notice of a meeting must still be given individually to every member.

Transition arrangements
A company should notify its shareholders which method(s) it wishes to adopt. Companies would only need to give this initial notification once to each shareholder using its existing method of communication with the relevant shareholder.

It is not proposed that any further transitional process is required to inform shareholders of the change to their rights under the new law. The proposal contemplates that this transitional notification is to be given on an individual basis.

Amount of notice
The Government is also considering reducing the 28 day period of notice for meetings of listed companies to 21 days (which currently applies to all other companies).

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