Person writing an electronic draft

Can I Use an Electronic Signature to Sign Company Documents?

Electronic signatures are a fast and convenient way of completing transactions. The whole idea is to save time, minimise paper-driven processes, and allow important documents to be signed from anywhere in the world.

What is an Electronic Signature?

Not all forms of electronic signing are considered to be valid. An electronic signing must satisfy statutory requirements to be valid.

An electronic signature is valid if it is:

  • A signature which is typed or
  • A picture inserted in an appropriate place in a document

The most common form of electronic signatures is the click-wrap method, often used to accept the terms and conditions page before using an online service.

You will find many online services that facilitate electronic signing, including OneSpan, Adobe Sign, and PandaDoc. They integrate with business workflows in different ways.

Certain programs can collect signatures in various ways, such as signing with their finger on a touchpad interface, using a PIN code, entering their name, or just ticking on a checkbox.

The Law Commission’s Special Report

In September 2019, the Law Commission reported that electronic signatures are capable of being used to validate an executive document (including deeds), provided that:

  • The person signing the document wanted to authenticate it (intent)
  • And the formalities related to the execution of the documents are satisfied

This should settle any doubts about the use of electronic signatures in particular situations.

How Secure are eSignatures?

While the idea of putting sensitive documents on the internet can seem like a frightening prospect, eSignatures have made enormous strides in digital security since their inception. This is why they’re trusted by a growing number of businesses.

As an added measure, you should only pick a reputable eSignature provider that’s willing to explain the security measures they have in place to protect sensitive data.

Legal Documents Require Varying Degrees of Authentication

As a general rule, the more important the document, the more authentication each signature will require.

Here’s how it looks:

  • Simple ContractsThese contracts can be put into effect by using an electronic signature, provided the contract isn’t subject to specific statutory requirements.
  • Documents Subject to Statutory RequirementsIn the case of documents subject to statutory requirements, you’ll have to satisfy various authentication measures. One prominent example is the contract for lands and assets. If you provide an electronic signature with the intention (keyword being intention) to authenticate the documents, this is usually all that is needed for the document to be executed in writing and considered valid.
  • DeedsElectronic signatures can be used to execute a deed, provided that the person adding their signature fully intends to authenticate it and all formalities for the signature are satisfied. Deeds also require the physical presence of a witness. In this case, both individuals must be in the same room at the same time of adding their esignatures to the deed.If the document doesn’t satisfy the above conditions, it could survive as a simple contract instead.It is important for all documents to abide by the execution provisions to ensure that they are fully in compliance with the law. Otherwise, there is a potential for the documents to be rendered invalid and therefore, not binding on any of the parties.
  • Company SealsIf the company is only authorized to execute deeds using a seal, then the directors won’t be able to use electronic signatures.
  • Company DocumentsThe company’s constitutional documents may dictate if an electronic signature is acceptable for daily transactions. If the company doesn’t provide details about executing documents, the document containing the electronic signature may be considered to be valid, unless it is proven otherwise.

Is it Possible to Dispute an eSignature?

Unless there is evidence indicating that the documents were forged or there is doubt about the signatory’s intent, an electronic signature is considered valid. Different courts use various tests to assess the authenticity of a signature.

In summary

There are various reasons to start using electronic signatures, the most important being that of convenience. It’s better for you, your employees, and your clients. eSignatures push the needle forward in terms of completing objectives, which translates into closing more deals.

The bottom line is, eSignatures give you an edge over companies that aren’t fully committed to online documents.

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