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01 May 2020

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Companies, Trusts, Partnerships & Superannuation
Federal

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Corporations - COVID-19 and voting in special general meeting

We act for a company that needs to hold a special general meeting to vote on the purchase of property. The constitution requires 'significant business matters' to be decided on by a secret ballot vote of members.

Due to COVID-19, meeting in person is not an option. We propose to issue a 14-day notice followed by a circulating resolution of members.

There is nothing in the constitution at all about circulating resolutions. On that basis, does every member need to vote? If we were to hold a physical meeting, only 40% of members are required for a quorum.

Answered

Thank you for the question.

In the absence of discussion in a meeting of members, and in view of the serious nature of a property acquisition, the members could discuss the proposal in a teleconference before taking a vote in the manner we suggest below. If that presents difficulties, then a letter could be circulated with an explanation of the voting method proposed, and inviting members to express any contrary views. This could then be circulated amongst the members, before proceeding to take the vote.

In the notice, the proposed resolutions - simple, special or unanimous - are stated, and giving due regard to the privacy of each member, the method by which votes may be cast. One way is for members to return a copy of the notice with their vote in a tick box below the resolutions. The first resolution would dispense with the need for an in-person meeting in view of the isolation and social distancing presently in force. The second resolution would address the property purchase.

A circulating resolution is authorised by the Corporations Act 2001 but may not satisfy the privacy considerations mentioned. If all members support the motion, it is the simple solution.

Regards

Mentor