A EX LISTED Company Secretary writes...
We have been looking at Docusign as a platform for signing documents electronically and in principle it looks a good tool. However we have dilemma because the majority of our documents require a company seal and the law on virtual company seals is somewhat confusing.
On one hand the implication is that the use of electronic seals is a criminal offence under section 45(4) of the Companies Act 2006 (under s.45 it is an offence to use a seal that doesn’t have the name of the company engraved on the seal. An electronic seal cannot be ‘engraved’) whilst on the other hand the EU eIDAS Regulation (now UK eIDAS) states the use of electronic seals is possible.
Does anyone use electronic seals and if so what is their take on the law for electronic seals?
I know the technical legal argument about the use of the word “engraved” in s.45(4) but I have been ignoring it since about 2010 onwards (in the context of share certificates simply having the company seal printed on them without use of an engraved seal) and in practice it has never been an issue or even raised as an issue. I doubt if the courts would even take the point, as by and large they adopt a pragmatic approach that reflects reality (e.g. the courts have held that a document can be an email and that email can be “signed” by having a name appear on the email). Live dangerously – pass a board resolution to adopt as a company seal the Docusign version of the seal, start using it, and see if anything adverse happens!!