Throughout the COVID-19 pandemic, Australians have seen a series of temporary measures which sought to modernise the requirements for the execution of documents, bringing the Corporations Act 2001 (Corporations Act) closer to the digital age in light of the challenges posed by the health crisis.
Whilst previous amendments were only temporary, the Corporations Amendment (Meetings and Documents) Bill 2021 (Bill) – which became law on 23 February 2022 – finally makes these changes permanent.
The amendments
The Bill amends various sections of the Corporations Act, permanently introducing a swathe of welcomed clarifications and modifications.
The Act now:
- permits an individual acting with the company’s express or implied authority to execute documents (including a deed) on behalf of a company (see section 126). Previously, deeds could not be executed by an individual unless that individual had been appointed an attorney under a properly executed power of attorney;
- permits company signatories to sign documents (including deeds) under sections 126 and 127 by signing in electronic form, provided the method of signing:
- identifies the person and indicates their intention in respect of the information recorded in the document; and
- is ‘as reliable as appropriate’ for the purpose for which the information was recorded (or is proven in fact to have fulfilled the required functions above, by itself or together with further evidence);
- clarifies that signatures, (electronic or physical), do not need to be affixed to the entire contents of a document;
- clarifies that sections 126 and 127 displace the common law rule that a deed must be delivered and be on paper, parchment or vellum;
- overrides the requirements for a signature to be witnessed when executing a deed for a company under section 126 and section 127(1);
- allows for a document to be executed by split execution, in different forms and with different methods;
- permits proprietary companies with a sole director and no company secretary to sign under section 127(1) and 127(2)(c), regardless of whether the sole director is also the company secretary;
- provides that ASIC will be required to accept any form that has been validly electronically signed; and
- extends the assumptions of purported signatory identity in section 129(5), which previously only applied to a signatory who stated they were sole director and sole secretary of a company, to all signatories signing under 127(1) including a sole director, a sole director and company secretary, two directors, and a director and a company secretary.
What you need to do
Whilst the amendments to the Corporations Act certainly make the execution of documents less onerous, it is still important to ensure you are familiar with and comply with the requirements of the Corporations Act and seek legal advice in the case of any uncertainty.
More information
If you have any queries or would like further information about this article, please contact:
Justin Hill
Principal
M: 0418 578 701
E: justinhill@pageseager.com.au
Sarah Standen
Lawyer
T: (03) 6235 5147
E: sstanden@pageseager.com.au
Published: 6 July 2022
