The digital landscape has seen a boom in the last few years. Zoom was the new normal after the pandemic spread. Now, it's 2022 and the metaverse has risen. Web 3 is in the works and technology is evolving at an incredible rate.
Companies and agents who sign electronic documents on behalf of companies or agents are fortunate that the lawyer-client relationship governing the execution of documents has changed legitimate traffic.
Temporary changes to the Corporations Act (Cth) ( Corporations Act), were made in 2020 as a response to COVID-19. This allowed companies to electronically sign certain legal documents required by law firms.
These changes are now permanent thanks to the Corporations Amending (Meetings & Documents) Act 2022(Cth) ( Amendment Act), which took effect on 23 February 2022.
Electronic signatures and contracts are the future of business.
What's an Electronic Contract?
Electronic contracts are also known as online contracts, digital contracts, or contracts. They are digital platforms versions and copies of legal documents. They can be sent electronically via the Internet and other digital communication methods. These contracts can be executed (signed) electronically in corporate counsel.
Electronic execution contracts can be legally binding just like traditional paper and pen contracts.
What does this mean for companies?
The Amending Act effectively adds section 110A to Corporations Act. This allows electronic documents, including deeds, to be signed electronically by companies or their agents on their behalf.
This means that documents can be electronically scanned (rather than printed pages) and signed by the signer electronically (such as a digital signature).
New rules do not require that parties to an agreement sign the same copy as the other. They don't have to sign the same copy.
This allows one party to use a digital signature in order to sign an electronic contract copy, while another can print a copy and sign it manually.
Two signed copies of the contract, known as counterparts, will be combined to form an executed contract.
The old legislation required that a company appoint an agent by signing a deed. The deed would grant the agent the power to sign documents for the company.
This section of the Act was repealed. A company does not need a deed in order to appoint an agency. This simplifies the process for companies to enter into contractual arrangements.
Why is this important?
These changes make it easier and more accessible to create contracts. It streamlines the process via technology and makes it more accessible for businesses. We support the signing of a written agreement when an agreement is being discussed between two parties. Therefore, we welcome any changes.
We are expecting more changes
Additional changes to the Act will be made on April 1, 2022. These will address the growing use of technology in business operations. This will include provisions relating to members' meetings and legal requirements.
Our company offers a complete e-signature solution that transforms the traditional document signing system into a completely digitized system of creating, managing, and processing signed credentials. This incredibly reduces manual efforts and makes the whole process a lot easy and fluid. Also, as a business you get to serve your users more promptly, efficiently, and accurately.