Section 127 Signatures: Practical Guidance for Australian Finance Deals

Why Section 127 Matters for Australian Finance Leaders

Australian finance and legal teams are making permanent changes to how they approve and sign contracts. As of 2024, amendments to the Corporations Act 2001 (Cth) confirm the use of electronic signatures for company documents under Section 127. Finance, legal, and operations leaders now have a clear mandate to improve execution processes and manage risk as they move away from paper records.HopgoodGanim reports that digital signatures, first used as a pandemic solution, are now a core part of mainstream finance dealmaking. Sprintlaw explains that Section 127 now explicitly confirms the legality of electronic document execution by Australian companies. Business leaders must carefully adjust policy, workflow, risk controls, and technology infrastructure to capture efficiency and maintain compliance.

What the 2024 Amendment to Section 127 Changes

Section 127 allows electronic document execution where:

• The signature method clearly identifies each signatory and confirms their intent to agree.
• The process fits the document’s legal importance.
• Signing authority aligns with company rules, typically two directors, or one director and a company secretary, or a sole director/secretary for some proprietary companies.

Witnessing and company seals are no longer required for company documents. Each director or signatory may use their own digital signature method. The law supports combining different tools and workflows in one transaction.Section 126 and 127 also clarify that authorized agents, company representatives, and attorneys can sign digitally. Each signatory can use the platform they prefer, such as DocuSign or an alternative. No director or agent needs to be physically present.

How Digital Execution Fits Into the Finance Deal Process

Reducing Cycle Times Before Signing

Consider a company arranging a syndicated loan across Australia and overseas. Digital execution platforms let directors sign within hours, even from different cities or countries. No courier is needed; the lender receives a complete, time-stamped audit trail, improving deal speed and documentation quality.

Contract Lifecycle Automation and Compliance

Legal operations can use a contract lifecycle management (CLM) platform to route documents, check authority under Section 127, and enable signatures only for the right people. Once executed, the system locks and archives the version, giving legal and finance teams access to accurate audit trails and cycle time data.

Supporting Both Digital and Paper Signatures

Some directors and stakeholders may prefer to sign on paper. For example, in a cross-border export finance deal, one director signs digitally and another emails a scanned wet ink signature. The CLM workflow accepts both, compiles the signatures, and ensures the execution meets Section 127 rules.

When Wet Ink Is Still Needed

While most finance agreements now accept electronic signatures, some exceptions remain:

• Banks, regulators, or international parties may ask for wet ink on high-value, complex, or regulated transactions.
• Manual signatures may still be needed for transactions involving jurisdictions without electronic execution laws, or for certain instruments governed by state or foreign law.

Managing Digital Signature Risks

To safely use digital execution for finance contracts, leaders should:

1. Confirm that banks, regulators, and counter parties accept electronic signatures before closing deals.
2. Require signature solutions to track and log every signer’s identity, authority, time, and intent.
3. Update internal policies to reflect current law and technology.
4. Schedule legal reviews for cross-border or high-risk agreements, especially if unfamiliar execution tools are used.
5. Train legal and business teams on digital signature risks and fall backs.

Measurable Impacts for Finance Organizations

Companies adopting electronic execution for finance deals report:

• Shorter contract cycle times, often cutting finalization from days to under two hours. Some organizations see 50–80 percent faster execution.
• Lower signature error rates, since automated workflows restrict access to authorized users and require mandatory fields.
• Reduced manual effort by legal, finance, and operations staff, who spend less time following up on paperwork.
• Stronger audit trails and up to 70 percent less manual follow-up in audits ([Adobe][11]).
• Real-time compliance tracking using digital repositories.
• Faster funding or refinancing due to less paperwork bottlenecks.

Legal and compliance teams benefit from centralized, searchable contract archives and an improved framework for authorizing signatories. Training and policy updates standardize exceptions and reduce enforcement risk.

Key Practical and Technical Considerations

To support digital signing under Section 127:

• Integrate e-signature applications with CLM, document, and identity systems.
• Align digital signature protocols with cybersecurity standards and procurement rules.
• Enforce version control and encrypted storage for sensitive agreements.

Rollout works best when legal, finance, and operations jointly plan adoption. Key metrics like turnaround times, error rates, and business impact help adjust training and policy.

Comparing Execution Options: Digital vs. Wet Ink

Implementation Checklist for Legal and Business Teams

1. Update execution policies to match the current Corporations Act.
2. Evaluate and adopt approved e-signature and CLM tools.
3. Map situations where wet ink is required.
4. Train all signatories in new workflows and exception handling.
5. Schedule ongoing audits of both process and compliance.

Conclusion

The 2024 changes to Section 127 give Australian companies a clear legal, operational, and risk framework for using electronic signatures in finance. By applying robust governance and regular training, organizations can reduce deal times, cut manual work, and improve compliance. Where exceptions remain, clear policies and digital tools support rapid adaptation.---

References

[1]: GlobalSign - Using E-Signatures under the Amended Corporations Act 2001 in Australia: https://www.globalsign.com/en/blog/using-e-signatures-under-the-amended-corporations-act-2001-in-australia[2]: HopgoodGanim - Electronic signatures and virtual meetings amendment: https://www.hopgoodganim.com.au/news-insights/electronic-signatures-virtual-meetings-amendment/[3]: Sprintlaw - Signing Documents Under Section 127 of the Corporations Act: https://sprintlaw.com.au/articles/signing-documents-under-section-127-of-the-corporations-act/[4]: OneSpan - eSignature Legality in Australia: https://www.onespan.com/resources/esignature-legality/australia[5]: KWM - E-signing by companies under the Corporations Act here to stay: https://www.kwm.com/au/en/insights/latest-thinking/e-signing-by-companies-under-the-corporations-act-here-to-stay.html[9]: Lawelements - Electronic signing of documents made permanent under the Corporations Act: https://www.lawelements.com.au/electronic-signing-of-documents-made-permanent-under-the-corporations-act/[10]: ACT Law Society - Electronic Execution Essentials (PDF): https://www.actlawsociety.asn.au/publicassets/b41404e1-1214-f011-9124-00505687f2af/Presentation%202_Property%20Law_Electronic%20Execution%20Essentials%20-%20ACT%20Law%20Society%20Presentation_2.pdf[11]: Adobe - Electronic Signature Laws & Regulations - Australia: https://helpx.adobe.com/legal/esignatures/regulations/australia.html