The Federal Government has released draft legislation to introduce permanent reform allowing Australian companies to electronically execute company documents.
In August the Federal Government passed legislation to execute documents electronically under s 127 of the Corporations Act, for a temporary amendment until 31 March 2022.
From 6 May 2020 until 21 March 2021 the Corporations (Coronavirus Economic Response) Determination (No1) 2020 and Corporations (Coronavirus Economic Response) Determination (No3) 2020 were in place, but there was a gap between 21 March 2021 and 14 August 2021 of uncertainty around the electronic execution of document.
To avoid this uncertainty, the Treasury Laws Amendment (Measures for Consultation) Bill 2021: Use of technology for meetings and related amendments), introduces permanent reform allowing Australian companies to electronically execute company documents (including deeds) under section 127 of the Corporations Act.
In order to sign an document electronically, (a) a method must be used to identify the person and indicate their intention to sign the document, (b) the copy or counterpart must include the entire contents of the document, and (c) the method used must be reliable and appropriate for the purposes. Platforms such as DocuSign and AdobeSign can be used for authenticating intention, or they can be sent with a covering email acknowledging an intention to be bound.
In the lead up to national reform, companies and individuals should be careful to ensure that any documents they sign electronically will be legally affective.