Electronic execution of documents by companies
In the NT, our Electronic Transactions legislation looks to facilitate the use of electronic transactions due to the importance of the information economy to the future economic and social prosperity of Australia. The only exemptions are in relation to Wills and Powers of Attorney. Additionally, and unfortunately, we remain the only jurisdiction in Australia where it is still not possible to settle the sale or purchase of a property electronically.
As a result of COVID-19 and measures put in place to address isolation and lockdowns, the position for corporate Australia is continuing to improve. This is especially so given that, on 22 February 2022, the Corporations Amendment (Meetings and Documents) Act 2022 (Cth) came into force. This law established a permanent mechanism for Australian companies that provides for electronic execution of documents. Importantly, as a Commonwealth law, it also prevails over any differing NT legislation.
Examples include the following:
1) The signing of separate documents by two or more officers of a company continues to be permitted. The new measures go a step further, however, in that there is no need for signatories and counterparties to exchange the “entire contents” of the subject document following signing.
2) Specifically, section 110A of the Corporations Act now provides for “technology neutral signing” – that is, it does not matter whether signatures by corporate officers are ‘wet-ink’ or electronic. As a result, a company can now engage in the sale or purchase of property and complete a transfer form using all-ink, all-electronic or ink and electronic signatures. Given it is Commonwealth legislation, the NT’s Land Titles Office must accept such a document – and it does, although with the request that wording such as “in accordance with section 110A of the Corporations Act” is included.
If you run your business through a corporate structure, these changes mean that attending to the execution of documents has now been made just that little bit easier.
Please feel free to call Samantha Hansen on (08) 8941 6355 or email sam@bowden-mccormack.com.au should you wish to discuss any business issues.