Section 250N of the Australian Corporations Act 2001 (Cth) require public companies to hold their Annual General Meetings ‘within five months after the end of its financial year’. Failure to comply with the said section would result in the imposition of fines of up to $1,000.00 and/or imprisonment for three months for the offending director(s). It would also severely affect the corporate standing of the public company, which would seriously damage its share prices and may expose the directors to personal liabilities for breach of their directors’ duties.

However and unfortunately, public companies do not enjoy nimble corporate maneuverability – the consequence is that board decisions are made slowly and sometimes, the company may not be able to hold its AGM on time.

In a recent endeavor by Brightstone Legal, we assisted with and succeeded in allowing a public listed company on the ASX to extend its AGM deadline.

Background

Our client, pursuant to section 250N of the Corporations Act, needed to hold its AGM by the last day of November 2018. This meant that the notice of its AGM needed to be dispatched by 2 November 2018, being at at least 28 days before the date of the AGM.

In and around the end of October 2018, the board passed a resolution to carry out several related-party transactions, for which ASIC needed to review and approve pursuant to section 218 of the Corporations Act. This also meant that the notice of AGM needed to be first reviewed by ASIC, followed by ASX, with a collective turn-around period of 10 business days – not to mention that the section 218 application needed to be supported by an extensive expert report, which would have taken more time.

Ultimately, it was observed by the board that it was functionally impossible for the company to hold its AGM by the last day of November 2018. Consequently, the corporate legal team of Brightstone Legal took carriage of the matter to make an application to ASIC for the extension of AGM deadline.

Process

The process necessitated the making of a 2501 application through e-mail lodgement, accompanied by the appropriate fees payable to ASIC via cheque, credit card or BPay.

Subsequently, extensive submission needed to be made on behalf of the company to obtain the grant. Brightstone Legal also corresponded closely with ASX to expedite its review process, which ultimately led to the successful application.

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