In this article, I will cover what you need to know about appointing a proxy at a private Australian company.
This guidance is from the Corporations Act 2001.
In a hurry? Jump ahead.
First, in the context of this article, a proxy is someone that’s eligible to attend and cast a vote at a shareholder meeting on another shareholder's behalf.
The rules for who can appoint a proxy are in section 249X of the Corporations Act 2001.
The proxy can either be an individual or a body corporate.
And, as a refresher, a body corporate is a company registered by ASIC in Australia.
If the shareholder is able to cast 2 or more votes, then they may appoint 2 proxies.
And, if a shareholder does this but does not set out how many votes each proxy has, then each proxy may exercise half the votes.
Below we’ll look at the rights of proxies.
Now, proxy rights are found in section 249Y of the Corporations Act 2001.
Basically, a proxy has the same rights as that shareholder, namely to:
Also, if you have a constitution, be sure to check what it says about proxies because in some instances, proxies are not able to vote on a show of hands.
Any proxy appointment form sent to a list of people willing to act as proxies, must also be sent to shareholders that ask for the list.
And the company must send the form or list to all its members eligible to appoint a proxy to attend and vote at the meeting: section 249Z Corporations Act 2001.
For a proxy to be valid, a signature or other authentication is essential.
And, for your easy reference, you can find the regulation section below.
Below is the information you'll need to appoint a proxy:
Below we'll see what the Corporations Regulations say about authenticating a proxy appointment.
Authentication of appointment of proxy is covered under section 250A of the Corporations Act 2001. This section says an electronic authentication of an appointment of a proxy must include:
An appointment does not have to be signed.
And if the appointment is unsigned, it is taken to have been dated on the day it is given to the company.
Below, we'll cover the proxy document rules.
For the appointment of a proxy to be effective, the company must receive proxy documents at least 48 hours before the meeting (unless the constitution states a shorter period):
And, the proxy documents can be sent to:
An appointer may advise the proxy the way the proxy should vote on a resolution.
Below are the rules for proxy votes per section 250BB of the Corporations Act 2001.
And, in some situations, there may be a transfer of a non-chair proxy to a chair, for example, if a proxy (that is not the chair) is not in attendance or does not vote on a resolution: section 250BC Corporations Act 2001.
A proxy won't be able to vote on a resolution for the pay of a member of key management personnel if they are themselves key management personnel or a closely related party.
The exception to this rule is if:
ASIC may declare that the conflict of interest rule does not apply and that a casting of a vote is not prevented on a resolution.
Finally, a proxy who is not eligible to vote on a resolution as a shareholder may vote as a proxy for another shareholder that is eligible to vote, however, their appointment must state the way they are to vote on a resolution.
Also, the proxy vote can be valid even if the shareholder dies or revokes their appointment - this is a replaceable rule, which you can read about more here.