Use of electronic signatures by a Guernsey company

Basic contracts and most other documents can be signed by a Guernsey company using an electronic signature. That was the position under Guernsey customary law (following UK common law) and subsequently confirmed by the Electronic Transactions (Guernsey) Law, 2000, as amended (the ETGL).

An electronic signature does not need to be in any specific form or have any degree of authentication (eg by DocuSign or Adobe Sign), although the use of authentication platforms may provide additional comfort to the parties.

It is still important to check that a company’s articles of incorporation (the Articles) do not restrict or prohibit the use of electronic signatures. We also recommend that the use of an electronic signature is expressly authorised in the board resolution approving the relevant document(s).

There may be practical difficulties if a witness to any signature is required, and the witness is unable to be in the same physical place as the signatory. However, the Companies (Guernsey) Law, 2008, as amended (the Companies Law) does not require documents entered into by a company to be witnessed. In this context, it is worth noting that Guernsey law does not distinguish between a deed and any other types of documents.

For certain documents, such as powers of attorney, trusts, and contracts and conveyances of real property, the position is more complicated and will depend on the circumstances. This includes documents containing powers of attorney and trust provisions, for example security, shareholder and partnership agreements. Under the Electronic Transactions (Exemptions) Order, 2001, as amended (the Exemptions Order) these documents do not benefit from the provisions of the ETGL.

However, in our view, the Exemptions Order does not prohibit the use of electronic signatures for such documents from 2001 onwards. Rather, it preserves any historical requirements for physical signature or additional formalities (such as notarisation). Accordingly, documents which traditionally required such formalities will continue to do so, whereas documents which did not may continue to be signed electronically. We believe this approach is consistent with Guernsey customary law and the explanatory note to the Exemptions Order.

Real property

Conveyances and contracts in respect of Guernsey real property must be in a specific form that is not consistent with the use of electronic signatures.

In respect of real property situated outside Guernsey, we see no reason why a Guernsey company could not execute conveyances and contracts electronically, provided that this is permitted under the law of the jurisdiction where the property is located.

Powers of attorney (including security)

A Guernsey company may execute a power of attorney (or a document containing a power of attorney) using an electronic signature. This reflects the customary law position in Guernsey prior to the ETGL and the Exemptions Order, and we do not consider that this legislation alters that position.

In addition, the Companies Law supports the electronic execution of a power of attorney granted by a Guernsey company. Section 118 provides that a power of attorney is not valid unless it is signed either (i) by a director of the company, or (ii) in such other manner as may be provided for in the Articles. Accordingly, where the Articles allow for electronic signature, the use of an electronic signature on a power of attorney should be effective.

As a matter of best practice, we recommend that any power of attorney (or document containing a power of attorney) expressly appoints the relevant delegate/authorised person as the Guernsey company’s ‘agent and attorney’ and includes an appropriate severance clause.

By contrast, an enduring power of attorney granted by an individual in Guernsey cannot be executed electronically.

Declarations of trust

A document declaring an express trust under Guernsey law should not be signed under electronic signature.

Where a trust is not governed by Guernsey law, we see no reason why a Guernsey company could not sign the document by means of an electronic signature, if permitted by the governing law of the trust.