Earlier in this year as most Australian’s we were through the first stage of the coronavirus pandemic (COVID-19) we saw the Treasurer, Josh Frydenberg announce temporary regulatory relief in respect of online meetings and the electronic execution of documents for a further six months.
You can read more about these announcements in our previous blog posts below:
As a result of the continued COVID-19 challenges, the Federal Government has now extended relief for a further six months through to 21 March 2021.
For SMSF trustees, where a corporate trustee exist. the further relief assists to give businesses certainty that when a company officers sign a document electronically, that the document has been validly executed.
This will apply to documents such as the signing of financial statements under section 35B of the SIS Act through to the execution of deeds. It is important to remember that where individual trustees exist, state-based relief measures will apply to determine if and how a document/deed may be electronically executed. It would apply likely, in particular in Victoria, that the relief currently provided under the COVID-19 Omnibus (Emergency Measures) (Electronic Signing and Witnessing) Regulations 2020 would be extended as well beyond its temporary relief to November 2020.
These changes will be made under the instrument-making power that has been inserted into the Corporations Act 2001 as part of our response to the Coronavirus crisis.
To execute documents, company officers will continue to be able to sign documents electronically, so for the duration of the extended relief, signatories will not be required to sign the same physical document. This will ensure that documents can continue to be properly executed at a time when ordinary business operations have been disrupted.
As previously indicated, this may provide for signing in the following ways:
- signatories can physically sign (wet ink) different copies of the document (split execution);
- signatory #1 can print, sign (wet ink) and scan the document, and then send that document to signatory #2 who does the same (modified split execution); or
- signatories can apply their e-signature to electronic versions of the document (electronic execution). The explanatory note to the Determination states that there are a number of ways by which officers might sign a document electronically, such as:
- pasting a signature into a document
- signing a PDF on a tablet, smartphone or laptop using a stylus or finger; or
- using a cloud-based signature platform such as Docusign or Adobe Sign.
The Government has indicated that it will continue to provide the necessary flexibility for businesses to deal with the challenges that have been presented by the coronavirus crisis and help facilitate the recovery on the other side.
Further details of this announcement can be found on the Treasurer’s website.