In what will come as good news to many, there have been recent developments allowing electronic execution by companies.
This blog provides an update regarding recent changes since our blog dated 20 July 2021. You can read our earlier blog here.
The Treasury Laws Amendment (2021 Measures No. 1) Bill 2021 (“the Bill”) passed both houses of the Commonwealth Parliament last week. The Bill received royal assent on 13 August 2021 and came into force on 14 August 2021.
The Bill temporarily amends the Corporations Act 2001 (Cth) (“Corporations Act”) from 14 August 2021 until 31 March 2022, to make it clear that companies can validly electronically execute documents (including deeds) provided certain criteria have been met.
These criteria will generally be met where each of the following are satisfied:
- a method is used to identify the person signing and their intention to sign a copy or counterpart of the document;
- that method was as reliable as appropriate for the purpose for which the document was generated or communicated in light of all the circumstances, or was (itself or with further evidence) proven to have identified the person signing and their intention to sign; and
- the copy or counterpart of the document being signed includes the entire contents of the document.
This reinstates the position that previously existed between 5 May 2020 and 21 March 2021 in which companies could utilise the benefits of electronic execution with certainty that their execution would be valid.
It is important to note that these changes do not apply retrospectively. Accordingly, the Bill does not change the position that companies were not permitted to electronically execute documents between 22 March 2021 and 13 August 2021.
The right for companies to validly electronically execute documents will expire on 31 March 2022, however we note that permanent changes are currently being considered by the Commonwealth Parliament.
Cowell Clarke will continue to monitor the status of these changes and can assist with queries about electronic execution by companies. Please contact us if you have any questions or require assistance.
This publication has been prepared for general guidance on matters of interest only and does not constitute professional legal advice. You should not act upon the information contained in this publication without obtaining specific professional legal advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication and to the extent permitted by law, Cowell Clarke does not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting or refraining to act in relation on the information contained in this publication or for any decision based on it.