Wet ink signatures no longer required for companies (effective from 14 August 2021 until 31 March 2022).
The Treasury Laws Amendment (2021 Measures No. 1) Act 2021 (Cth) (Act) came into effect on Friday 13 August 2021. The main amendments to the Corporations Act include:
1. Electronic signatures under section 127 (including deeds)
Finally the Corporations Act has seen the light (well at least until March 2022, with the hope that a further law will pass so that this becomes permanent). The Act amends section 127 of the Corporations Act by inserting a new sub-section 127(3B).
A copy or counterpart of a document may be signed by a company electronically, provided:
“A method is used to identify the person signing and that method indicates the person’s intention to sign a copy or counterpart (section 127(3B)(a) and it must be reliable section 127 3B (c)).”
Methods may include (which are considered reliable):
- Digital signing platform (i.e. DocuSign)
- Words to the effect: electronic signature of me, [insert name], affixed on [insert date/time]” below the relevant signature
- Signing by stylus tool, finger or mouse with a covering email confirming electronic execution
- by copying and pasting your signature into an electronic copy of a document
- by signing in wet-ink and scanning into your computer
A mixture of electronic signatures and wet-ink signatures is also acceptable.
2. Continuous disclosure laws
Civil penalties will arise where there has been a breach of continuous disclosure obligations where a company has knowledge, or is reckless or negligent.
3. Notices of meetings to be sent electronically
The new default position is that notices to shareholders are to be sent by electronic means or sending by post an electronic address at which the notice materials can be downloaded. Shareholders can elect to receive hard copy documents.
4. Virtual Meetings
Whether or not a company’s constitution allows it, the amendments mean that all companies can host virtual company meetings.
5. No retrospective effect
The changes introduced by the Act have no retrospective effect. Between 22 March 2021 (after the lapsing of Determination (No. 3) 2020 (Cth)) and 13 August 2021 (prior to the commencement of the Act) the Corporations Act did not expressly permit electronic execution by companies.
A welcomed change
These amendments (albeit temporary at this stage) allows companies to get on with business.