Recent changes to the Corporations Act to allow the use of an electronic signature on company documents are useful for some SMSFs, but a complete shift away from paper signatures for the sector is still not possible, according to a technical specialist with an administration provider.
Heffron head of SMSF technical and education services Lyn Formica said changes to the Corporations Act commencing on 1 April now allow for company documents, including trust deeds, minutes and resolutions of directors and shareholder meetings, to be signed in a technology-neutral manner.
Formica added this meant a signature could be made as wet ink or applied in electronic forms using systems like DocuSign, but the latter were limited by a range of factors.
“Bear in mind the change is specifically to the Corporations Act so anything that is governed by state-based law, such as witnessing requirements, is where we have not had any changes,” she said during a recent technical briefing.
“Even though the Corporations Act has been amended, it may still not be practical to be executing trust deeds using electronic signatures because we still need to have that deed witnessed and electronic witnessing rules are dependent on each state.”
She added financial institutions were also under no obligation to accept a digital signature as they may also be unfamiliar with them or not ready to accept them from clients.
A range of other documents are still paper-based only and plans to make them electronic have stalled due to the calling of the 2022 federal election or because work still needs to be completed on them, she said.
“As for director documents, consent to act and those sorts of things, we did have a bill before parliament that would also have allowed us to sign them electronically, but unfortunately that bill lapsed when the election was called,” she said.
“Treasury has the modernising business communications project, and the SMSF Association is working very hard with them to come up with a technology-neutral solution for the execution of the sort of documents that we use under super law, such as trustee declarations.
“These changes are still at the very early stages, we don’t even have draft legislation for some of them, and so it’s not very practical at this stage.”