What documents can be witnessed electronically?

Commercial

Covid-19 has halted normal occupational practices since the pandemic’s introduction in early 2020. With social distancing requirements once again being tightened in New South Wales, concerns have arisen as to how legal documents which require signatures to be physically witnessed can be executed.

Can I have my documents witnessed via an audio-visual link?

The short answer is yes.

The New South Wales Government addressed this witnessing issue through the implementation of the Electronic Transactions Amendment (COVID-19 Witnessing of Documents) Regulation 2020 which allowed for remote witnessing and attestation of certain documents.

These regulations have now been incorporated into Part 2B of the Electronic Transactions Act 2000 to allow the signing of those documents which usually require a witness to be physically present during execution. The documents which can be witnessed electronically include:

  • Wills
  • Power of Attorneys
  • Enduring Guardianships
  • Deeds and Agreements
  • Affidavits; and
  • Statutory Declarations

This Act allows for the witnessing of document signatures to occur via an audio-visual link such as ‘Zoom’ or Microsoft teams.

Are there any requirements for remote witnessing to occur?

This scheme merely acts to allow legal witness requirements to occur via an audio-visual link, and as such, all other aspects of document executions remain the same.

On top of usual execution requirements, the new scheme introduces certain obligations that will need to be followed in order to legally witness a document remotely. These include the witness must:

  • Observe the signing of the document in real time over audio-visual link
  • Confirm the signature was witnessed by signing the document or a copy of the document;
  • Be reasonably satisfied the document they witnessed is the same document or a copy of the document signed by the signatory; and
  • Endorse the document, or a copy of the document, with a statement specifying the method used to witness the signature and that the document was witnessed in accordance with the Electronic Transactions Amendment (COVID-19 Witnessing of Documents) Regulation 2020

How long will this change be in effect for?

The new witnessing scheme is currently legislated to end on 1 January 2022.

Can companies execute documents pursuant to section 127 of the Corporations Act electronically? 

With ongoing restrictions from the ongoing Covid-19 pandemic, a lot of companies are struggling to arrange for execution of documents pursuant to section 127 of the Corporations Act 2001.

Section 127 of the Corporations Act allows a company to execute documents without a common seal if the document is signed by:

  • two directors;
  • a director and a company secretary; or
  • for proprietary companies with a sole director who is also the sole company secretary, by that director.

Up until 21 March 2021, there were emergency reforms in place which allowed the use of electronic signatures to satisfy the requirements of section 127 of the Corporations Act 2001. With the expiry of the emergency reforms, companies must against execute documents under section 127 of the Corporations Act in wet ink signature only.

Alternative methods of executing documents

Executing in accordance with section 127 of the Corporations Act is not the only way a company can execute a document. The Corporations Act allows a company to execute a document in accordance with its constitution or by an agent or attorney given authority to do so.

It is therefore possible to amend a company’s constitution to allow a company to validly execute documents electronically. We can assist in amending your constitution to allow this to occur.

Proposed reforms

The Federal Government has released draft legislation amending the Corporations Act to allow for virtual meeting and electronic execution of documents. The draft legislation also proposes making it permissible to witness documents using technology, including video conferencing.

The draft legislation is currently in the consultation phase. It remains to be seen when it will commence (if approved).

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