Update on Electronic Signatures – Temporary Relief for Companies

12 May 2020

The Corporations Act 2001 (Cth) (Corporations Act) has been temporarily modified to allow companies to execute documents using electronic signatures and/or using ‘split execution’ methods (where company officers sign separate copies of the document).


The modifications provide welcome relief in an area in need of reform and modernisation.  Hopefully consideration will be given to the introduction of permanent measures to a similar effect once the 6-month relief period expires.


About the Determination

The Corporations (Coronavirus Economic Response) Determination (No. 1) 2020 (Cth) (Determination) commenced on 6 May 2020 to provide short-term regulatory relief to those who are unable to meet their obligations under the Corporations Act due to the Coronavirus.


Amongst other things, the Determination modifies s 127(1) of the Corporations Act to expressly allow a company to validly execute documents (including electronic documents) without a common seal if each person required to sign on behalf of the company:

  • physically signs a copy or counterpart of the document in printed form; or
  • if the document is in electronic form, signs that document with an electronic signature.


The document signed must include the entire contents of the document, but need not include the signature of other persons signing the document – that is, ‘split execution’ is permitted.


In line with the Electronic Transactions Act 1999 (Cth), if a company officer signs using an electronic signature, the method used must sufficiently identify the signatory and indicate their intention in respect of the document’s contents.  The method must be as reliable as appropriate in the circumstances, or be proven in fact to have identified the signatory and indicated their intent.


The Determination also modifies s 129(5) of the Corporations Act to allow other persons to assume that a document has been properly executed on behalf of a company if the document appears to have been signed in accordance with section 127(1), as modified by the Determination.


Finally, although not expressly stated in the Determination, it is arguable the effect of the Determination is to also temporarily permit companies to execute deeds electronically and/or via split execution (see s 127(3) of the Corporations Act, which applies to documents executed in accordance with s 127(1)).


The Determination has effect for 6 months from its commencement.


This article provides general commentary only.  It does not purport to be legal advice.  We recommend that you seek professional advice having regard to your own particular circumstances.



Tasha Naige, Senior Associate in our Transactions Team

Email:  tnaige@dmawlawyers.com.au
Direct Telephone:  +61 8 8210 2244


The author would like to thank Ryan Parker for his assistance in preparing this summary.