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In news that will come as a relief to companies and their agents and representatives, the federal parliament has recently amended the Corporations Act 2001 (Cth) (Act) to permanently allow companies to execute documents by electronic means.

Although electronic signing has been permitted under the Act for much of the past two years (throughout May 2020 – March 2021, and August 2021 – February 2022), this was a temporary measure enacted in response to the COVID-19 pandemic. The decision to make electronic signing a permanent feature of the Act will therefore provide clarity and ongoing convenience to businesses.

What are the changes?

The Act was amended by the Corporations Amendment (Meetings and Documents) Act 2022 (Cth), which received royal assent on 22 February 2022. Provisions relating to electronic signing came into effect on 23 February 2022. Of these changes, the most significant are:

Electronic signing

New section 110A of the Act permits the execution of documents (including deeds) by, or on behalf of (i.e. by an agent), the company, by signing an electronic form of the document using electronic means, provided that:

the method of signing identifies the person and indicates their intention to be bound; and
the method of signing was reliable as appropriate in the circumstances.

Method and manner of signing

Section 110A also indicates that the person signing the document is not required to:

sign the same form of the document as another person;
sign the same page of the document as another person; or
use the same method to sign the document as another person,

which will allow some parties to execute documents electronically and others to execute them in a physical form.

Signing in multiple capacities

Finally, section 110A provides that a person who is signing a document in more than one capacity:

may sign the document only once if required or permitted by the document, so long as the document states the capacities in which the person is signing the document; and
is treated as a different person in each capacity in which they sign the document.

Signing as an agent

Section 126 of the Act has been repealed and replaced, and now allows for agents to execute documents without needing to be appointed by a deed, and to execute a deed (including electronically) without the execution needing to be witnessed.

Further changes to the Act will be introduced on 1 April 2022, and will cover (among other things):

the technology neutral (including electronic) sending of documents in relation to members’ meetings and members’ resolutions;
the ability of members to elect the method by which they will be sent documents (i.e. physically or electronically), and the requirement for the sender of documents (e.g. companies) to take reasonable steps to send documents in a manner that complies that election; and
the ability of members’ meetings to be held virtually only, if permitted or required by the company constitution expressly, subject to the obligation to give the members entitled to attend the meeting a reasonable opportunity to participate.

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Author, Isaac Hanna.

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