The changes

Electronic communications

Some of the first provisions of the Act to come into force allow companies to make greater use of electronic communications.

Electronic communications with shareholders by email, or via a website with notification, are allowed where an individual shareholder consents. Individual shareholders who prefer not to use this option have the right to request continued communication as hard copy.

Comment
The range of measures intended to further electronic communication should lead to substantial cost savings for quoted plcs and other multi-shareholder companies. Smaller companies should also see some practical benefits.

Decision making

The decision making process has been simplified in a number of ways, including:

all resolutions of private companies will be capable of being passed in writing, with the exception of those to remove a director or an auditor
written resolutions will be able to be carried with a majority of:
- over 50 per cent (for ordinary resolutions)
- 75 per cent (for special resolutions) of eligible votes
a private company will no longer need to hold an Annual General Meeting (AGM) unless the shareholders positively opt to do so. Public companies will continue to be required to hold an AGM. This must be within six months of the financial year end.