Thinking | 24 February 2022

Update: Electronic signing finally here to stay

By James Deady and James Pavlidis

The long awaited Corporations Amendment (Meetings and Documents) Bill 2021 (Bill) was passed by the Senate on 10 February 2022.

The Bill amends the Corporations Act 2001 (Cth) (Corporations Act) to establish a permanent mechanism to allow companies to execute documents (including deeds) electronically.

For many years there has been widespread confusion surrounding whether companies could sign agreements, deeds and other documents electronically and rely on the validity presumptions under the Corporations Act.

Since May 2020 a number of temporary regulatory changes have been made to provide COVID-19 related relief to make it easier for companies to execute documents electronically. However, this relief was due to expire on 31 March 2022.

The Bill now permanently reforms the relevant provisions of the Corporations Act and clarifies the approach companies can take regarding the electronic signing of documents.

The permanent reforms under the Bill include provisions under which:

  • Persons signing a document (including a deed) on behalf of the Company may sign the document electronically so long as:
    • a method is used to identify the person and indicate their intention to sign the document; and
    • the method used is as reliable as appropriate for the purposes for which the information was recorded, or proven in fact to have indicated the person’s identity and intention.

While a technology neutral approach is adopted in the Bill, the use of commercially available electronic signing platforms such as DocuSign would be likely to fulfil these requirements.

  • Separate copies of a document may be used by each person required to execute the document – this allows for so called ‘split execution’.
  • Different execution methods can be used to sign the same document (for example one officer can sign a hard copy version of the document and another officer can sign an electronic version).

The permanent changes to the Corporations Act regarding document signing came into effect on 23 February 2022. These permanent reforms are welcome in an area of long standing and widespread uncertainty.

Hall & Wilcox has extensive experience advising on electronic document execution issues. For more information, please contact our Technology & Digital Economy team.

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