19 August 2021
Execution solutions for remote working arrangements
The Treasury Laws Amendment (2021 Measures No. 1) Act 2021 (Cth) temporarily amends the Corporations Act 2001 (Cth) to facilitate electronic execution by companies, among other things. AGS Fact Sheet 38 has been updated to reflect these changes.
The Treasury Laws Amendment (2021 Measures No. 1) Act 2021 (Cth) received royal assent on 13 August 2021. The Act amends the Corporations Act 2001 (Cth) to, among other things, permit electronic execution of documents, including deeds. The Act ceases to apply on and from 1 April 2022.
The effect of the temporary amendments to the Corporations Act are similar to the temporary modifications to the operation of section 127 of the Corporations Act 2001 (Cth) made by the Corporations (Coronavirus Economic Response) Determination (No. 1) 2020 (Cth) and the subsequent Corporations (Coronavirus Economic Response) Determination (No. 3) 2020 (Cth) which were in force from 6 May 2020 to their expiry on 21 March 2021.
Main features of the Amending Act relating to electronic execution
Affixing a common seal
A new section 127(2A) of the Corporations Act provides that the fixing of a common seal is taken to have been witnessed by a prescribed person – being a company officer or officers – if that person or persons observe the fixing of the seal by electronic means, they sign the document and the document includes a statement that the person observed the fixing of the seal by electronic means.
Section 127(3B) of the Corporations Act now provides for the circumstances under which an electronic copy or counterpart of a document including a deed will be taken to have been signed by a person for the purposes of s 127. A document will be taken to be signed by a person if:
- a method is used to identify the person and to indicate the person’s intention to sign a copy or counterpart of the document;
- the copy or counterpart includes the entire contents of the document; and
- the method used was either
- as reliable as appropriate for the purpose for which the document was generated or communicated, in light of all the circumstances, including any relevant agreement; or
- proven in fact to have indicated the person’s identity and intention to sign by itself or together with further evidence.
Copies or counterparts
Section 127(3A) allows for physical copies or counterparts of a document to be signed where the copy or counterpart includes the entire contents of the document. Section 127(3C) also provides that the copy or counterpart of a document which is being signed or witnessed need not include further signatures, or the common seal.
Notes have also been inserted at sections 129(5) and (6) of the Corporations Act which refer to the new subsections, making it clear that the assumptions of due execution will apply where documents appear to be executed in accordance with the new laws.
Please refer to AGS Fact Sheet 38: Execution solutions for remote working arrangements for further detail concerning the latest developments relating to electronic execution across the jurisdictions.
Important: The material in Express law is provided to clients as an early, interim view for general information only, and further analysis on the matter may be prepared by AGS. The material should not be relied upon for the purpose of a particular matter. Please contact AGS before any action or decision is taken on the basis of any of the material in this message.