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Social distancing and the use of electronic signatures

25 March 2020

With vast numbers of people now working from home due to COVID-19 restrictions, finding more convenient methods of making binding transactions which are recorded in writing has become a priority.

We set out below what the current law says about electronic signatures and ways in which you can make use of them (as well as the practical considerations).

Simple contracts

In the absence of any requirements (contractual or statutory), these may be concluded using an e-signature.

Contracts required to be “in writing”/“signed”/“under hand”

In the absence of any requirements (contractual or statutory), a contract signed electronically, and which is itself in electronic form, would satisfy legal requirements.

Deeds

In the absence of any requirements (contractual or statutory), these may be executed using an e-signature. 

If a witness is required, the witness can attest the e-signature using an e-signature. However, the witness must be physically present with the signatory, and may not witness through video link.  Under the Companies Act 2006, two directors or one director and the company secretary may sign a deed on behalf of a company without the need for a witness. In such cases, the signatories do not have to be present together and also do not have to sign at the same time. 

If the need for a witness is unavoidable, the witness should be mindful of social distancing measures whilst ensuring they can actually see the signatory sign. Whilst it is not preferable, an adult family member who is not a party to the deed can act as a witness in most cases (subject to certain exceptions such as wills).

Directors’ and shareholders’ resolutions

Minutes of a directors’ meeting and directors’ written resolutions can be e-signed, as can shareholders’ written resolutions and minutes of a shareholders’ meeting.

Forms to be filed with HMRC

Due to the pandemic HMRC are temporarily accepting stock transfer forms and instruments by email (rather than post) and they may be electronically signed while this measure is in place.

Forms to be filed with the Land Registry ×

The Land Registry still insist in most circumstances on wet ink signatures, so e-signatures should not be used for forms and documents to be submitted without first seeking advice.

Whilst the above summary sets out the general position, there may be exceptions due to statutory formalities or evidential requirements (for example, for tax purposes) and there may be other rules for non-UK companies or non-English law contracts.  If unsure, please ask and we can provide an answer.

You can read more detail on the rules around e-signing in our two recent articles here:

https://www.lewissilkin.com/en/insights/dotted-lines-are-disappearing-but-the-law-commission-has-joined-the-dots-on-electronic-signatures

https://www.lewissilkin.com/en/insights/law-commission-confirms-legality-of-electronic-signatures

 

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