Salient Features of E-sign Laws in Hong Kong
Working from home has become the new normal since imposing existing limits on socialization to fight the COVID-19 outbreak. Consequently, it is not convenient to sign copies of paper documents, and many companies consider the use of e-signatures. But what are e-signatures, and what are the laws that govern the use of such modality?
The points below explain what e-sign laws are, and discuss the salient features of the e-sign laws in Hong Kong.
What Are E-signatures?
An e-sign (electronic signature) is a legal way for digital files or forms to receive approval or authorization. Virtually, e-signs can substitute a handwritten signature.
Electronic signatures (e-signatures), especially with online transactions, are widespread throughout Hong Kong. Under the Electronic Transactions Ordinance. e-signatures in Hong Kong holds the same legal standing as a wet-ink sign
Criteria for E-signs to Be Valid
As prescribed by the Electronics Transactions Ordinance, the following are the criteria for e-signatures to be valid:
- The signing person must attach their e-signature to an electronic system to identify themselves and imply their identification or authorization of the information provided.
- The system used to input e-signature should be accurate and reliable for the purpose the documents are provided.
- The person making use of the e-signature permits to use the system.
Where Can You Use E-signatures?
As stipulated in the ETO, below are documents where you can use e-signatures.
E-signatures are valid in simple agreements if there are no relevant criteria or restrictions in the agreement, and it is not exempted from the ETO implementation.
Deeds Completed By Hong Kong-incorporated Companies
It’s not a market practice to complete deeds with e-signatures. However, considering the deed’s value, electronic signatures provide parties to exchange PDF copies of e-signed documents to minimize being present in the same place.
Although Hong Kong courts have yet to evaluate it, signatures in deeds can be in electronic forms as long as ETO criteria are met.
Agenda’s And Amendments
Board minutes and written amendments signed using e-signatures are acceptable depending on the company’s guidelines. In doing so, the identity of the involved person (e.g., the shareholder) must be verified in a way provided by the company. If not provided, the person must have an identity declaration so that the company doesn’t have to question the validity of the e-signature.
Exclusions of E-signatures
Contrastingly, not all documents can be signed using e-signatures. The acknowledgement of e-signatures as inked signatures do not apply to the following documents.
- Last will and custody order or other testamentary records.
- A Trust.
- A power of attorney.
- Any tool needed for stamping.
- Government grants and leases conditions;
- Any transfer of ownership or other declaration in a written form referred to the Land Registration Ordinance, judicial decisions that concern any parcels of land or property in Hong Kong.
- Any transfer, lease, or legal fee for solicitors and Property Ordinance or arrangement referring to the disposal of real property;
- A floating charge paper, as referred to in s 2A of the Land Registration Ordinance.
- Court documents and oaths.
- Statute declarations.
- Summons and subpoena issued by the court.
- Negotiable Agreements.
Moreover, e-signatures do not apply to the signatures needed for any legislative, arbitral, statutory, or investigative process unless provided for the use of a legislation process.
Also, documents requiring additional formalities (e.g., witnesses) must be present and sign the verification form.
E-signatures can be convenient to use as long as you abide by the governing laws. With that, it is best to find a Corporate Secretarial Service Provider to make sure you do not bypass any of the e-sign laws in Hong Kong.
Particular to corporate secretaries and e-signatures, 3E Accounting Hong Kong is the ideal place to go for your business needs. Call us today, and our team will provide you with the best help that we can offer.