March 2021 | Nicola Sharp
Electronic execution under the Corporations Act suspended
The temporary COVID-19 relief measures imposed by the Federal Government expired on 21 March 2021. The Corporations (Coronavirus Economic Response Determination (No 3) 2020 (Cth) (Determination) enabled businesses to electronically execute documents through changes on the operation of provisions in the Corporations Act 2001. Despite belief that the measures would be further extended through the passing of the Treasury Laws Amendment (2021 Measures No.1) Bill 2021, parliament did not pass the bill suspending all temporary provisions.
What does this mean?
The temporary measures have now lapsed which means that the Corporations Act 2001 will revert to its previous provisions. Specifically, companies will no longer be able to execute documents electronically under s 127 of the Corporations Act. Instead, the application of s 127 reverts back to the requirement of officers to execute a single, static physical document: Bendigo and Adelaide Bank Limited v Pickard .
Meeting regulations have also reverted back to previous provisions:
- Meetings: can no longer be wholly virtual. Whilst some members of the meeting may connect online, the meeting must have a physical location.
- Notices: in compliance with s 249J (3A) of the Corporations Act electronic notice can only be sent to those who elect it.
Note that documents and meetings held prior to 21 March 2021 will still be deemed valid.
State & Territory legislation
Many states also enforced short-term legislation amendments in response to COVID-19. For example, New South Wales implemented the Electronic Transactions Amendment (COVID-19 Witnessing of documents) Regulation 2020 (NSW) under the Electronic Transactions Act 2000. This enabled the signing of specific documents to be witnessed by audio visual link (s 14G). Therefore, some companies may be able to rely on state legislation such as s 14G of the Electronic Act to electronically execute documents. However, if you wish to execute a document under s 127 then a wet ink signature is required.
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