The overarching message is clear. In the context of UK corporate transactions, DO use electronic signatures. There has been a general shift towards more widespread adoption of e-signatures (accelerated by the pandemic) and it’s safe to say that electronic signatures are here to stay. In October this year, for example, the Law Society reiterated the validity of electronic signatures by updating its 2016 practice note on electronic execution of documents. This further reinforced the Law Commission’s position in 2019 that an electronic signature is capable of being used to execute a document. It is acceptable to use e-signatures for most documents in the context of UK corporate transactions and we have therefore prepared some key Dos and Don’ts below:

  • DO use e-signing platforms. The use of e-signing platforms such as DocuSign is increasingly common and accepted as a valid form of e-signature. In fact, The Law Society acknowledged this year that adhering to the Mercury Procedures when arranging a virtual signing or closing is actually more straightforward through DocuSign as the entire final version of a document is uploaded for signature and all the signatories sign that same version.
  • DO still get consent from signatories when arranging a virtual signing or closing of a transaction. Those organising the signing process should still take appropriate authorisations from signatories to implement the dating and delivery of the relevant documents (and as relevant, the affixing of signature pages to the final agreed form of document).
  • DO ensure you are still fulfilling any necessary signing formalities. Deeds, for example, still need to be witnessed whether or not signatures are handwritten or electronic.
  • DO NOT witness e-signatures remotely. Witnesses cannot use Teams, Skype or any other kind of video-call or conference to witness e-signatures (or handwritten signatures, for that matter). They must be physically present with the signatory to witness their e-signature, even if they also then use DocuSign to sign the witness signature block. If it helps, spouses can now be used as valid witnesses, provided they are not otherwise involved in the transaction or a party to any of the transaction documents (another Covid concession).

There are of course certain circumstances in which e-signatures are not acceptable, or at least in which you should not assume that e-signatures are acceptable and obtain legal advice. If you’re interested in knowing more about when to use electronic signatures, some common pitfalls and other key considerations, read the full article here.