COVID-19 brought about a lot of uncertainty and change for individuals and businesses alike. However, one positive outcome of the pandemic was the introduction of temporary measures to the Corporations Act 2001 (Cth) (Corporations Act) to allow companies and registered schemes to use technology to sign documents and hold meetings. These measures are now permanent under the Corporations Amendment (Meetings and Documents) Bill 2021. This article describes the permanent changes introduced by that Bill and the rules around how you can electronically sign documents.
Electronic Execution of Company Documents
Following the new Bill, company signatories can now sign agreements and deeds electronically. Notably, the revised Corporations Act does not stipulate a particular type of technology that companies must use to execute contracts. This is because there are likely to be new technologies in the future. However, the method of signing must:
- identify the person and indicate the person’s intention in respect of the information recorded in the document; and
- be as reliable as appropriate or proven to have indicated the person’s identity and intention to sign.
Notably, a document executed as a deed under the Corporation Act does not require a witness. Likewise, you do not need to deliver it to be validly executed as a deed.
Split Execution
Split execution is now possible and each signatory may sign using different methods. For example, the first person signing may do so using wet ink, otherwise known as a handwritten signature. Likewise, the second signatory may use a digital signature. The document executed by subsequent signatories need not include the earlier signatory’s signatures.
Execution by Agents
Under the revised Corporations Act, agents can now sign documents (including deeds) on behalf of a company. Also, you do not need to appoint agents by a deed to execute a deed on the company’s behalf. Further, the agent’s signature does not need a witness.
Continue reading this article below the formTechnology Used for Meetings
Companies, companies registered as charities, registered schemes and disclosing entities can now hold meetings of members in a hybrid (remote and in-person) or physical meeting. Likewise, your company can hold fully virtual meetings where your company constitution expressly provides for this virtual format.
Participation includes:
- holding the meetings at a reasonable time and place;
- using technology reasonably capable to connect to more than one physical location; and
- ensuring that members can ask questions or make comments orally or in writing.
Electronically Sending Documents Related to Meetings
Meeting-related documents can include the following:
- minute books;
- resolutions to be considered without a meeting;
- annual financial reports; and
- notifications to members of election rights.
Your company can send out these documents in one of the following ways:
- hard copy;
- electronically;
- physically with access to information electronically;
- electronically with access to information electronically; or
- posting the information on a website (if the document is an annual report or otherwise permitted by the regulations).
Ultimately, the use of electronic documents is permitted.
Key Takeaways
With the legalising of electronic signing and virtual meetings, the Corporations Act has finally been brought into the modern world. Previously, the signing process for important documents, like deeds, needed to be conducted in person with a witness. However, Covid-19 has changed the way companies operate. You can now sign documents electronically without the requirement of a witness.
If you would like more advice around document execution, our experienced business lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.
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Frequently Asked Questions
Company signatories can now sign agreements and deeds electronically. The method of signing must identify the person and indicate their intention in respect of the information recorded in the document.
Companies, companies registered as charities, registered schemes and disclosing entities can now hold meetings of members in a hybrid (remote and in-person) or physical meeting. Fully virtual meetings are permitted only where the company constitution expressly provides that meetings can be held wholly in a virtual format.
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