Signing documents electronically is now permitted due to COVID-19
The COVID-19 pandemic has caused the Australian Government to find alternative solutions to facilitate the efficient continuation of business for Australian entities. As it has become increasingly difficult for company officers to sign documents in wet-ink due to self-isolation measures, the Australian Government has moved to allow company officers to sign documents electronically.
On 5 May 2020, the Federal Treasurer issued the Corporations (Coronavirus Economic Response) Determination (No. 1) 2020 (Determination) to temporarily modify section 127(1) of the Corporations Act 2001 (Cth) (Corporations Act). The Determination specifically provides that agreements and deeds in electronic form can now be signed electronically by company officers. The Determination details that the changes are applicable from 6 May 2020 for a period of 6 months. The Determination does not apply to the following entities:
foreign companies;
statutory corporations;
governments; and
partnerships of non-companies.
The Determination allows companies to execute a document without a common seal if the company officers:
sign a physical copy or counterpart of the document; or
clearly identify the person signing and indicate their acceptance of the document, in accordance with the provisions of the Electronic Transactions Act 1999 in relation to electronic acceptance.
The electronic execution of documents should clearly identify the person signing the document and clearly indicate their acceptance of that document. To satisfy the requirements under the Determination, company officers should:
paste a copy of their signature into the relevant document;
sign a PDF on a tablet, smartphone or laptop using a stylus or finger; or
implement cloud-based signature platforms like DocuSign.
The Determination allows for Annual General Meetings to be held online, as well as facilitating the appointment of proxies and the taking of votes via electronic means. However, companies should ensure that they are still meeting the requirements of their own Constitutions.
The Determination does not operate retrospectively. Therefore, any documents signed electronically by company officers prior to 6 May 2020 are not validated by the Determination. If company officers are in doubt about whether they have validly executed documents, parties may ratify documents in accordance with the determination, satisfying section 127(1) of the Corporations Act.
Important
The contents of this publication should not be replied upon as legal advice, but instead as commentary and general information. Specific legal advice about your circumstances should always be sought separately before taking nay action based on this publication.
Contact our team
George Henderson
george.henderson@aghlaw.com.au
+61 408 909 575
Angus Henderson
angus.henderson@aghlaw.com.au
+61 432 023 750