Government signs off on electronic signatures

By Thaw Thaw Htin

15 March 2022

Since 2020 we have provided updates on the temporary changes to the Corporations Act 2001 (Cth)(the Act) brought in to support Australian businesses during the COVID pandemic, including permitting the electronic execution of documents on behalf of a company.¹

The passing of the Corporations Amendment (Meetings and Documents) Act 2022 has now made permanent some of the previously temporary changes to the Act.

From 23 February 2022 a person can rely on a document (including deeds)² which has been electronically executed on behalf of a company.³ The permanent amendments to the Act allow a company to execute a document by electronic signature or the fixing of the company seal witnessed electronically.

What do I need to do to sign electronically?

For a company director or secretary and the witness to sign the document:⁴

1. A method must be used to identify the person and their intention in respect of the information in the document; and
2. The method must be proven in fact or reliable as appropriate for the purposes for which the information was recorded.

Unlike the temporary measures, the permanent changes to the Act do not require the electronic copy signed to include the entire contents of the document.

Minor differences in the way that the document is signed can be disregarded as long as a method is used to indicate that the person observed the signature or fixing of the seal as required under section 127(2A)(c) of the Act.

Can I use the company seal?

Yes. The fixing of the seal must be witnessed in the same way that a signature is witnessed – the witness must observe the affixing of the seal and sign the document.⁵

I am a sole director

The amendments to section 127 of the Act apply to sole director companies with no company secretary.⁶

Do all parties need to sign the same document?

No. Separate copies of the same document may be countersigned by different people.⁷

Some parties can sign electronically and others can sign a hard copy.⁸

What programme or technology do I need to use?

The intention of the legislation is not to prescribe any particular type of technology and leaves room for emerging technologies to be used in the future.

The method must be reliable as appropriate. To avoid any doubt it may be best to consider using electronic agreement software.

Can I still sign it in hard copy?

Yes. The legislation does not limit the ways that a person may sign a document.⁹

Note that the company constitution may specify how a document may be executed.

I am signing the same document in different capacities; do I need to sign it multiple times?

No, you only need to sign once. However, the signature block must clearly specify the capacities in which you are signing the document.¹⁰

Can an agent sign electronically on behalf of a company?

Yes. The Act makes provision for agents to make contracts and for companies to execute documents via an agent.¹¹

My company is a foreign company

The amendments do not apply to foreign companies.

For more information, please contact the authors:
Thaw Thaw Htin | Principal

1. See our earlier articles on the Corporations (Coronavirus Economic Response) Determination (No. 1) 2020 and Corporations (Coronavirus Economic Response) Determination (No. 3) 2020)
2. Section 110(3) of the Act
3. Division 1 of Part 1.2AA of the Act.
4. Section 110A (2) of the Act
5. Sections 127(2A) and 129(6) of the Act
6. Section 127(1)(c) of the Act
7. Including multiple people signing for the same party also known as split execution.
8. Section 110A(4) of the Act
9. Section 110(4) of the Act
10. Section 110A(5) of the Act
11. Sections 110 and 126 of the Act.

Disclaimer: The information published in this article is of a general nature and should not be construed as legal advice. Whilst we aim to provide timely, relevant and accurate information, the law may change and circumstances may differ. You should not therefore act in reliance on it without first obtaining specific legal advice.