We have recently seen a shift in our legislation to allow for electronic signing by individuals, however, corporations have been left wondering when they will be able to do the same.
A draft Bill has been proposed that will allow corporations to not only electronically sign documents, it will also allow for other modernised amendments to the Corporations Act 2001 (Cth) such as the split execution of documents, the ability to hold virtual meetings (subject to the company’s constitution) and the electronic distribution of meeting materials.
As with other legislation regulating the electronic signing of documents, there will be certain conditions that will need to be met. An officeholder may only sign a document electronically provided that the signed copy includes the entire content of the document (rather than just the execution pages), and a reliable method of electronic signing is used. The identity of the signing officeholder must also be verified, and their intention to sign the document must be indicated. At Kalus Kenny Intelex, we use an electronic signing platform that allows for all three of these conditions to be met in an efficient manner.
The COVID-19 pandemic has forced a shift in the way that companies meet and do business, and the proposed amendments are yet another stepping-stone on the pathway to creating ‘paperless’ transactions.
If the Bill is passed and the above provisions become permanent, we recommend that you revisit and update your company constitution to allow for hybrid and virtual meetings.