After proving your startup’s success in your home country, you may be thinking about the next step for growth — expanding overseas.
This free guide aims to introduce startup founders to the Australian startup market.
As a result of the COVID-19 pandemic, the Government has introduced several measures to address the difficulties faced by many businesses. One of those measures was an exception to the requirement that a person signs a deed with wet ink. For many businesses, the ability to sign a deed electronically was a welcome change that simplified this process. This is especially the case for parties that could not sign the deed in the same location. In addition, with 2021 bringing further lockdowns and restrictions on the movement of individuals, the Government reintroduced temporary legislation in August 2021. These additional changes enable companies to execute documents electronically, including deeds.
After proving your startup’s success in your home country, you may be thinking about the next step for growth — expanding overseas.
This free guide aims to introduce startup founders to the Australian startup market.
The two main types of contracts are:
The primary difference between a deed and an agreement is that for an agreement to be legally enforceable, you must give the other party something of value in consideration for their promise. Typically, the value would be in the form of money. For example, Cate pays Carl $50 to clean her car.
On the other hand, a deed only requires a promise or commitment to do something, and there is no requirement for consideration.
Common examples of deeds include:
You must follow several formal requirements when executing a deed to ensure. These requirements ensure the deed is valid and enforceable (which differ from an agreement). These include that the deed must:
Additionally, there are circumstances where you need to have a witness view the signing of your deed. For example, suppose you are signing a deed for a personal matter (as opposed to as a company). Hence, in some Australian states, you must sign the deed in the presence of a witness. That witness needs to be an individual who is not a party to the deed.
Further, for companies, either two directors or a director and a company’s secretary must sign the deed. There is no requirement for a separate witness to sign the deed when signed on behalf of a company.
Before the COVID-19 pandemic, another formal requirement in most states was that a party must sign a hard copy of the deed with wet ink. However, due to the Covid-19 pandemic, there have since been some temporary measures in place.
Notably, under the Corporations Act, companies can now electronically sign deeds, provided that they meet several criteria.
It is important to note that this is a temporary measure. Unless the Government grants an extension, this measure will expire on 31 March 2022.
When electronically signing a deed with another business, for you to rely on the other party’s execution under the Corporations Act, you must be satisfied that:
The amendments to the Corporations Act allow companies to execute deeds electronically. However, you should still make additional checks to ensure that you or your company can electronically sign the actual type of document.
For example, in Queensland, you cannot electronically sign land titles transfer forms. This is the case, even where both parties to a transaction are a company. Likewise, in New South Wales, there are certain mortgage documents that you cannot sign electronically.
At present, you can sign a deed electronically due to changes to the Corporations Act, so long as you meet particular criteria. However, once those laws expire, this may no longer be the case. Notably, different states and territories in Australia follow an inconsistent approach to the signing of documents. Hence, it is prudent to get legal advice before executing a deed electronically, so you can ensure its proper and valid execution.
If you need help with executing deeds or any other form of contract, our experienced contract 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.
A deed is a type of contract. Usually, a valid agreement requires one party to give another party something of value in consideration for their promise. Typically, the value would be in the form of money. However, a deed does not require the element of consideration. A deed only requires a promise or commitment to do something.
Under the Corporations Act, companies can now electronically sign deeds, provided that they meet several criteria. It is important to note that this is a temporary measure. Unless the Government grants an extension, this measure will expire on 31 March 2022.
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