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Proposed digitalisation of company meeting notices

The Government has recently invited comments on its proposal to modernise the law applying to the way that notice of a general meeting is distributed to shareholders. Indiana Bridges, Thomson Reuters

Key policy features of the proposals are to:

  • better reflect the way Australians engage with digital communication technologies and content;
  • permit notice of general meetings (including AGMs) to be received electronically via a near-universally accepted channel (subject to the discretion to 'opt out' by the shareholder); and
  • reduce compliance costs.

Current law — 'opt in' approach to electronic delivery

Under the current law, companies must give notice of a general meeting to each of their shareholders individually, or by sending a notice by post, usually with reply-paid envelopes (to encourage shareholder responses). This is the case for most companies, unless an individual shareholder 'opts-in' to receive the notice by electronic means.

New law — 'opt out' approach to electronic delivery

The modernised law would permit companies to distribute notices in an efficient and cost effective manner, without affecting the rights of shareholders to continue to receive printed copies of notices. Such changes contemplate:

  • dissemination of notices of general meeting, AGM's and associated documents, by email;
  • shareholder consent to more general public notice, by way of ASX announcement and a media release; and
  • that a company could amend its constitution to provide for the use of electronic communications, and provide an 'opt-in' period for shareholders who wish to elect to receive notice in hard copy.

Further information is available at Treasury.gov.au

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Julian Smith is a partner in the Maddocks Commercial team.

Julian advises extensively in the following areas:

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Julian advises clients ranging from public companies servicing the wholesale financial services market to high net worth individuals and their advisers.

Julian has been with Maddocks since undertaking articles in 2001.