Digital Signatures

When directors sign deeds, they must do so with a wet signature  – that is sign with a pen – on an actual piece of paper. A digital signature is no good.

So, no more electronic documents and no more digital signatures  for deeds. The laws which govern electronic signatures simply do not apply to the Corporations Act 2001.

See Bendigo and Adelaide Bank Ltd & Ors v Kenneth Ross Pickard & Anor [2019] SASC 123

A document will be a deed when it is expressed to be a deed, or it says it is “Signed, Sealed and Delivered”.  If it does not say either of these it will be an agreement –  though it may not be enforceable.

Any document can be signed by a company by following section 127(1) of the Corporations Act 2001.  This section requires the signature of two directors.  The same piece of paper must be signed by the two directors.

Where in a sole director company that person is also the sole secretary, the signature of the sole director is sufficient.

The most likely reason that a deed will be used is if payment or value does not move from one party to another.  Common examples of deeds include guarantees and trust deeds.

If a deed is not properly signed, it may be ineffective. If a document which has been signed is not a deed, then a different analysis will be required to determine if it is effective. That analysis will depend on the particular document.  In many cases, though no all, the document will still be effective.

What Next? 

  • An audit of all documents which have been signed should be done.
  • If any Deeds are located, they:-
    • must be checked to ensure that they contain only wet signatures; and
    • that a single document  bears all the signatures required.
  • If any agreements are located, they should be reviewed for effectiveness.
  • If documents have not been properly signed, advice will be needed on what steps should be taken to be taken to remedy that situation.


No comments yet. You should be kind and add one!

Post a comment