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Company Directors and Officers Now Able To Use Electronic Signatures From 1 April 2022

Due to the changes occurring as a result of COVID-19, temporary measures were put in place to streamline requirements for companies to execute documents during the pandemic. 


In February 2022, draft legislation was introduced into Parliament to remove the temporary measures and make them permanent. From 1 April 2022, the Corporations Act 2001 (Cth) will be amended to allow Directors and Secretaries of Companies (Company Officers) to sign documents electronically. 


Historically, certain documents such as Deeds have required a ‘wet signature’ meaning that Company Officers would need to physically sign the original document in pen for it to be enforceable. The amendments to the Corporations Act provide that a Company Officer may sign a document under Section 126 or 127 (as the case may be) in either physical form by hand or electronic form using electronic means, if the method used for signing identifies the person, indicates their intention to be bound and is as reliable as appropriate. 


Further, parties are no longer required to all sign the same document. This essentially allows the parties to sign documents in counterparts which speeds up the signing process for all parties. 


These changes also allow Office Holders to use electronic platforms such as DocuSign to sign and be bound by documents; using the ease and convenience of signing documents on phones or tablets while on the go, and removing the need to print, sign and post. 


These changes will reduce the uncertainty regarding the use of technology when executing document and Deeds. Companies now have certainty that the electronic and technological solutions previously adopted in 2020 and 2021 can validly be used well into the future. Welcomed by businesses, the new mechanism will permit a more effective use of technology, which will be particularly beneficial in a post-pandemic hybrid working environment. 


If you are unsure on your obligations to meet these new requirements when signing documents or require further information regarding these changes and the impact it will have on your business, do not hesitate to contact one of our commercial lawyers to discuss further.

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