Since the onset of the COVID-19 pandemic in early 2020 measures were introduced to allow for the electronic execution of documents. On 23 February 2022 these measures were made permanent following the Corporations Amendment (Meetings and Documents) Bill 2021 receiving royal assent, which allows all companies registered under the Corporations Act 2001 (Cth) (‘the Act’) to execute documents (this extends to deeds) pursuant to ss 126 and 127 of the Act using electronic means.
In practice, the amendments under s127 of the Act largely adopt the procedure which existed under the temporary measures.
Not only do the new amendments allow for electronic signing, but they also change the way that companies can execute deeds. Additionally, companies can now hold virtual meetings and distribute related meeting materials using electronic means.
Amendments by the Bill and Key Features of the Act
Sections 126 and 127 allow those who are company signatories to execute documents (including deeds) in electronic form and using electronic means. The amendments also specify that a signature does not need to be affixed to the entire contents of the document (this applies whether the signature is attached electronically or in physical form). ASIC is also required to accept forms which are signed electronically.
Changes to section 126 also override the requirement for a person’s signature to be witnessed when executing a deed. These amendments, which were not covered as part of the temporary measures, allow an attorney or other agent for a company to electronically sign a deed irrespective of the State or Territory law which in fact governs the deed.
Delivery of Deeds
Sections 126 and 127 now also remove the common law rule that deeds need to be delivered and that they must be on some form of physical paper.
The new amendments also allow authorised individual agents to execute documents (including deeds) on behalf of a company under section 126. The agent does not need to be appointed by the deed and is entitled to execute it without using a common seal. Additionally, the amendments remove requirements associated with the witnessing and delivery of deeds. The signing of documents can be completed electronically and where a company executes a document through an agent, an individual can rely on the assumptions specified in s 129(3) of the Act for dealings associated to the company.
Proprietary Companies with a Sole Director
Where a proprietary company has a sole director and no company secretary, the sole director will be permitted to sign under s 127(1) or 2(c). This amendment differs from the previous temporary measures which allowed only for a sole director who was also a company secretary to sign.
A company is also permitted to execute documents by split execution. In practice, this means that a signatory is not required to sign the same form or page of the documents or use the same method of signing as another signatory.
When are the amendments in effect?
The amendments to signing and executing documents in electronic form using electronic means applies on and after 23 February 2022.
Please contact Rose Litigation Lawyers if you have any questions or would like to know more about the recent changes.