The permanent modernisation of key aspects of the Corporations Act 2001 (Cth)
Under Australian law contracts and company documents must be correctly signed to be valid, binding and enforceable. Among the archaic common law rules that have existed is that deeds had to exist in ‘paper, parchment or vellum’. Until now.
The long awaited Corporations Amendment (Meetings and Documents) Act 2021 became law on 22 February 2022. This legislation has permanently modernised a number of aspects of the Corporations Act 2001 (Cth) by allowing companies to use technology to meet regulatory requirements including the electronic execution of company documents by the use of what we currently refer to as “e-sigs”. In the process these archaic laws have rightly been consigned to legal history making it clear that corporate deeds can now exist in purely electronic form.
Importantly, the new legislation ensures that company documents will no longer be invalid or unenforceable due to non-compliance with mere formalities. For example, it is no longer a requirement that a corporate deed be witnessed or delivered to be valid.
The new legislation also introduces new provisions to enable companies to send notices electronically as its default position and to hold online meetings.
The reforms build on temporary relief measures (due to COVID) which will remain in place until 31 March 2022.
Regarding the timing of the implementation of the changes introduced by the new legislation, it applies to documents executed on or after 23 February 2022 and meetings held after 1 April 2022.