Under the Corporations Act, public companies (both listed and unlisted) must hold an AGM at least once a calendar year and within five months of their financial year end. This means companies with a 31 December balance date must hold an AGM by no later than 31 May this year.
However, in light of the travel and social distancing restrictions arising from COVID 19, ASIC has announced that it will take no action against companies which seek to delay their AGM’s until 31 July 2020 (ie for 2 months) or such later date as ASIC advises or which seek to hold hybrid or virtual AGMs within the same period.
A ‘hybrid’ AGM is one where there is a a physical location and online facilities, whereas a ‘virtual’ AGM is one that is conducted solely online
ASIC’s ‘no-action’ position on virtual AGMs is conditional on the technology providing members as a whole, a reasonable opportunity to participate. In ASIC’s view, this would include:
- members being able to ask questions of the auditor and Management
- voting occurring by a poll rather than a show of hands.
ASIC’s no-action position does not restrict the ability for shareholders to challenge the validity of a meeting or the passing of resolutions, so it is important that companies consider their constitution to determine the most effective way to hold a meeting in the current circumstances.
Baker Cook Advisory 