Document signing is moving with the times but caution still required

“This bill helps to move us closer to a situation where technology neutrality will apply more universally to the Treasury laws portfolios, and in this instance in the context of all sections within the Corporations Act,” Mr Dunn said.

There are three key changes to the bill, all contained in Part 1 of Schedule 1, including:

• Electronic signatures and document execution: The bill proposes amendments to the Corporations Act, allowing for the electronic signing and execution of all documents under the Corporations Act 2001. This extends the previous measures which only allowed for electronic execution with respect to signing certain documents in accordance with s.127(1) of the Corporations Act, such as deeds.
• Electronic document transmission: The bill also facilitates the electronic sending of specific documents, further streamlining communication processes and reducing the reliance on physical mail.
• Relief from sending documents with incorrect member details: Companies often face challenges when member contact details are outdated or incorrect. The bill introduces relief for companies from the obligation of sending documents in such cases, reducing unnecessary administrative burdens.

According to Mr Dunn, it was the COVID-19 pandemic that underscored the importance of digital communication, which saw a number of temporary measures in place at Commonwealth and state levels.

“Some of these measures have now become permanent, including the ‘Meetings and Documents Act’ which allowed companies to sign and execute documents either electronically or using traditional wet-ink, and to send meetings-related documents in electronic or hard copy formats,” Mr Dunn said.

Once royal assent is received, Mr Dunn said it will mean that all documents under the Corporations Act can be signed electronically.

“It also broadens the categories of documents that can be sent electronically or in hard copy,” he said.

However, he said there is still a need for caution.

“At this stage, the Superannuation Industry (Supervision) Act 1993 remains exempted from the operation of the Electronic Transactions Act (ETA) 1999, with the only exception that exists relating to section 35B of the SIS Act –signing of financial statements,” he said.

“Having been involved in previous Treasury discussions about the impact of these proposed measures for the SMSF industry, I would suspect that the next round of consultation will include proposed technology neutrality changes to the superannuation laws.

“At this time, there’s no indication of when this may occur, which ultimately means that both professionals and trustees need to be acutely aware of what documents can be signed electronically, and those that must be signed in physical form – wet-ink.”

Ultimately, Mr Dunn said that by embracing digital solutions and reducing administrative burdens, “this finalised bill ensures that the Corporations Act is better aligned with the realities of the modern business landscape”.