After temporary COVID relief measures allowed the implementation of digital signatures and electronic meetings, the government has kicked off a consultation as it seeks to make the changes permanent.
The government has introduced draft legislation on permanent measures enabling companies to sign and send documents and hold meetings electronically, and is now seeking feedback on the bill from interested stakeholders.
The bill would make permanent the temporary relief introduced at the start of the COVID-19 pandemic, establishing a statutory mechanism for the electronic execution of company documents including meetings-related reports, and to use technology to hold meetings.
The measures first came into effect in May 2020 via a temporary power given to the Treasurer, which allowed him to issue a determination that allowed companies to satisfy certain legal obligations of the Corporations Act 2001 via electronic means.
The temporary measures enabled many businesses to accept digital signatures on documents – such as for home loans and property transactions – for the first time.
The powers expired on 21 March 2021, but were subsequently reinstated from 10 August 2021 through 31 March 2022 following widespread calls for their reintroduction.
A submission from the Australian Banking Association to an earlier consultation on making the reforms permanent noted that “the lapsing of the temporary reforms without an extension or permanent solution being put in place created material disruption in the legal and financial sectors”.
The return to requiring a “wet ink” signature led many to push for a permanent resolution to allow electronic signatures.
The government first announced it would consult on making the temporary measures permanent in the 2020-21 budget’s digital business plan.
Feedback from a consultation held earlier in the year noted there was overwhelming support from industry representatives to cement the measures, including listed companies, share registries, business associations, and legal professionals.
Submissions close on 10 September 2021.