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Amendments made to the Corporations Act 2001 (Cth) (Act) in April 2022 provided much needed clarity about the validity of executing various documents electronically.
The amendments were made pursuant to Schedule 1 of the Corporations Amendment (meetings and documents) Act 2022 and capture:
(a) documents (including a deed) to be executed in accordance with section 127( 1 )1
(b) meeting of members or directors2; and
(c) resolutions to be considered by the directors or members of a company, without a physical meeting. 3
As a result, parties signing on behalf of a company now have two options to sign any one of the above documents, namely ( 1 ) a physical form of a document by hand in wet ink or ( 2 ) an electronic form of the document using electronic means. 4
The amendments leave no room for doubt, by going as far to clarify that the Act does not require a person to:
(a) sign the same form of the document as another person; or
(b) sign the same page of the document as another person; or
(c) use the same method to sign the document as another person.
This means that execution will be legally binding if one party to a document sign in wet-ink, and the other signs by electronic means.
To satisfy the requirements of the Act however, parties signing on behalf of a Company must ensure that the method of signing correctly identifies the person and is reliable, considering all the circumstances.
At Burch&Co we provide our clients the option to distribute any document we prepare on their behalf via DocuSign, or arrange execution in person, to provide peace of mind that the signatures on their documents satisfy the requirements on the Act.
Notwithstanding the amendments, there remain circumstances (for example, dealing with certain Government Authorities) where ‘original’ (wet-ink signed) documents are required, so it’s always best to consider all stakeholders to be satisfied by execution, before signing.
If you have any further questions on this topic, please feel free to reach out to a member of our Corporate Team on (03) 9948 1950 who would be happy to assist.
1Corporations Amendment (meetings and documents) Act 2022, Sch 1 Part 1.2AA Div 1 Section 110)(1)
2Corporations Amendment (meetings and documents) Act 2022, Sch 1 Part 1.2AA Div 1 Section 110)(2)(a),(c)
3Corporations Amendment (meetings and documents) Act 2022, Sch 1 Part 1.2AA Div 1 Section 110)(2)(b)
4Corporations Amendment (meetings and documents) Act 2022, Sch 1 Part 1.2AA Div 1 Section 110A(1)