Sign online - An eSignature Guide


Managing Partner, Global International Business Reorganisations Leader at ILC Legal, LLP in the United States

Before COVID-19, e-signatures were already growing rapidly. This is not surprising, as e-signatures can be used to execute legal documents in most jurisdictions. They are also accepted in some courts. However, the pandemic has led to increased use of e-signatures by both individuals and businesses.

Only a few countries recognize e-signatures today, but there are still some instances in which they may not be acceptable. There are many e-signature standards that can be used. __S.7__

It is important that when you are completing an international reorganization project that crosses borders or has complex legal requirements that you identify the circumstances in which e-signature is appropriate. If 'wet-ink signatures are required, this will prevent any potential delays or invalidation of transactions.

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The eSignature landscape has changed significantly due to COVID-19. Here are some examples of where eSignatures may be limited.

Different laws covering different entities: Although a contract's governing law may allow for execution via e-signature (e.g., a contract signed by an overseas signatory might not be allowed to use e.signature due to a prohibition in the company's constitution or the requirement to attach a company seal). This is true for many Nigerian companies.

Registering contracts It is important to confirm the local position where a contract needs to be registered. Some local authorities don't accept e-signed documents. A number of filings relating to the government in China, for example, must be made with documents that have wet-ink signatures.

Types of documents: E-signing is not permitted in certain jurisdictions. Documents relating to real property transfers in Barbados, or intellectual property transfers in South Africa are examples of such documents.

Witnessing: It is still a matter of debate whether electronic signatures can be used to sign documents that need witnessing. While this is theoretically possible, it can be difficult to witness electronic documents. This is why it is not often recommended.

Notarization: There is still the requirement that documents must be signed before a notary in various jurisdictions. E-signatures are not likely to be accepted in cases where this requirement is met. During the COVID-19 pandemic, notaries were more flexible, commercial, and accommodating. However, it is uncertain if these practices will continue after normal service resumes.

Diverse options

Although the term "electronic sign" is commonly used, it is worth noting that there is a variety of e-signatures. It is important to choose which one is best for your document, as well as what type of document you are signing. These are the most popular electronic signatures:

  • SES: Standard Electronic Signature is an electronic signature that can be applied to any document by a signer to prove their intent to sign.
  • QES: Qualified electronic signature provides additional support in court, by providing the digital equivalent to a handwritten signature. It is a digital signature implementation that meets the specific specifications of a government. This includes using a secure signing creation device.
  • AES: Advanced Electronic Signature (AES) is an electronic signature type that is unique and can identify the signatory.

We are most familiar with standard electronic signatures but there may be times when more advanced electronic signatures will be required. In Argentina, for example, electronic agreements must be signed using a QES.

Future proof

During the pandemic lockdowns, e-signatures proved to be crucial. The temporary rules that were established by different government bodies concerning e-signatures acceptance may become permanent. The UK tax authorities accept e-signed documents to process stamp duty relief applications. If a notarial form must be completed in Austria, e-signatures are now permitted.

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It is clear that e-signatures have the potential to improve the efficiency, accuracy, and governance of legal transactions. They will be more popular and more advanced as technology advances. It is important for businesses to know where, when, and how they can be used.

Our clients work closely with us to plan the use e-signatures for large, complex, international business reorganization projects. We can also assess the documents within your organization to make sure that e-signing is in compliance with local laws. This can have a significant impact on your business.