As of 21 March 2021, the Corporations (Coronavirus Economic Response) Determination (No 3) 2020 (Cth) (Determination) lapsed because it reached the end of its six (6) month period as prescribed by section 9(3) of the Determination. This means that the ability for companies to execute documents electronically, or e-signing, is no longer acceptable under subsection 127(1) of the Corporations Act 2001 (Cth) (Act). Section 6(3)-(4) of the Determination authorised e-signing in response to the COVID-19 restrictions, as stated in the Explanatory Statement:
“…in this uncertain time when public health and travel restrictions and postal delays remain in place. This gives certainty that when company officers sign a document electronically (including an electronic document), the document has been validly executed.”
The Treasury Laws Amendment (2021 Measures No. 1) Bill 2021 (Cth) (Bill) intends to extend e-signing until 16 September 2021.[1] However, the Bill has been adjourned by the Senate until 11 May 2021.[2] As there are no other regulatory reliefs or permanent legislation in place, companies are required to return to pre-COVID conditions when executing documents. This means signatories are required to sign the same ‘static’ document.[3] The signatories must be either:
- two (2) directors of the company;
- one (1) director and one (1) secretary of the company; or
- the sole director for a proprietary company when they are also the secretary.[4]
Takeaways
Companies can no longer execute documents by e-signing. They should return to the framework for document execution provided under section 127(1) of the Act.
Links and further references
Legislation
Commonwealth, Parliamentary Debates, Senate, 18 March 2021, 99 (Amanda Stroker, Assistant Minister to the Attorney-General)
Corporations (Coronavirus Economic Response) Determination (No. 3) 2020 (Cth) Explanatory Statement
Treasury Laws Amendment (2021 Measures No. 1) Bill 2021 (Cth) Explanatory Memorandum
Corporations (Coronavirus Economic Response) Determination (No 3) 2020 (Cth)
Treasury Laws Amendment (2021 Measures No. 1) Bill 2021 (Cth)
Cases
Bendigo and Adelaide Bank Limited v Pickard [2019] SASC 123
Further information about directors duties
If you need advice on your obligations as the officer of a company, contact us for a confidential and obligation-free discussion:
Malcolm Burrows B.Bus.,MBA.,LL.B.,LL.M.,MQLS.
Legal Practice Director
T: +61 7 3221 0013 (preferred)
M: +61 419 726 535
E: mburrows@dundaslawyers.com.au
Disclaimer
This article contains general commentary only. You should not rely on the commentary as legal advice. Specific legal advice should be obtained to ascertain how the law applies to your particular circumstances.
[1] See Treasury Laws Amendment (2021 Measures No. 1) Bill 2021 (Cth) sch 1; see also Treasury Laws Amendment (2021 Measures No. 1) Bill 2021 (Cth) Explanatory Memorandum, 3.
[2] See Commonwealth, Parliamentary Debates, Senate, 18 March 2021, 99 (Amanda Stroker, Assistant Minister to the Attorney-General).
[3] See Bendigo and Adelaide Bank Limited v Pickard [2019] SASC 123, [70].
[4] Corporations Act 2001 (Cth) s 127(1).
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