In an effort to adopt a more technology neutral approach, the Commonwealth government has formalised certain temporary allowances for the use of electronic signatures which had been put in place during the Covid-19 pandemic.
During the Covid-19 pandemic, the Commonwealth government recognised the need for legal documents to be executed using electronic signatures. It put in place temporary measures to allow the use of electronic signatures and for ‘virtual meetings’ to be conducted using videoconferencing software. However, it has been slow to enact legislation to formalise the technology neutral approach to corporate law adopted during the pandemic.
The arrangement during the pandemic was that the Australian Securities and Investment Commission (ASIC) would not take action against companies regarding the use of e-signatures on regulatory submissions or conducting virtual meetings.
After significant delay, Parliament has recently enacted legislation to formalise the use of electronic signatures (in addition to traditional ‘wet-ink’ signatures) with respect to all documents which are required or permitted to be signed under the Corporations Act 2001 (Cth) (Corporations Act), and allows the fixing of the common seal of a corporation to a document to be done electronically. The Treasury Laws Amendment (Modernising Business Communications and Other Measures) Act 2023 (Cth) (Modernising Act) received royal assent in mid-September, more than a year after a previous version of the act was introduced by the previous coalition government, with most of the provisions now in force.
In a wider context, the Modernising Act updates existing requirements in Treasury laws, including the Corporations Act, to improve Treasury’s overall technology neutrality. In addition to allowing documents to be signed electronically, the Modernising Act allows a broad range of documents to be sent in electronic form, such as meeting related documents, financial reports, bidder and target statements and compulsory acquisition notices. Further, the Modernising Act does away with requirements to send documents to a member where contact details are incorrect, outdated or unascertainable, and amends requirements to publish notices in newspapers to allow for a more modern publishing in a manner ‘accessible to the public and reasonably prominent’.
Additionally, the Modernising Act clarifies that Treasury portfolio regulators such as ASIC, the Australian Prudential Regulatory Authority (APRA), and the Australian Competition and Consumer Commission (ACCC) will also be able to hold hearings and examinations virtually, and it removes outdated payment restrictions, allowing for more payments to be made electronically.
The explanatory memorandum to the Modernising Act predicts the measures will save businesses around $115 million annually.
SWS Lawyers can support companies navigating this new business communications regime. If you have further queries, please contact SWS Lawyers’ Corporate and Commercial team.
This article was co-written by Associate, Reid Farrell.
This article is not legal advice. It is intended to provide commentary and general information only. Access to this article does not entitle you to rely on it as legal advice. You should obtain formal legal advice specific to your own situation. Please contact us if you require advice on matters covered by this article.