Digital Signatures (not only) in Times of the Coronavirus
Due to the coronavirus, work in the area of start-ups is at present also frequently or predominantly done in the home office. In this context, the question of whether and to what extent documents can be signed using digital signatures is becoming increasingly relevant. There are various providers such as DocuSign, for instance, who provide different offers for the electronic signature of documents.
1. Which electronic signatures are available?
As the legal effects differ, it is important to know that different electronic signatures exist under the so-called eIDAS Regulation (Regulation (EU) No.10/2014 on electronic identification and trust services for electronic transactions in the internal market and repealing Directive 1999/93/EC). In short, there are in particular:
- The simple electronic signature pursuant to eIDAS: This is the digital signature most frequently used in the start-up sector, where a service provider such as DocuSign transmits documents electronically to the contractual partner or shareholder, opens them in the service provider's software and signs them electronically with one click. This procedure corresponds to the text form - just like an e-mail.
- The qualified electronic signature pursuant to eIDAS: This signature requires the identity of the signatory to be verified and certified on site (also possible by video). Such an electronic signature must comply with certain minimum technical standards and be provided by an appropriately certified body. Only such qualified electronic signature replaces the handwritten signature and is equivalent to the written form as a so-called electronic form.
2. Practical recommendations
2.1 Using the simple electronic signature is usually sufficient - but beware of the exceptions!
The simple electronic signature is sufficient wherever the law prescribes text form, if at all:
- For internal processes such as travel expense reports.
- Text form is also sufficient for "simple shareholder resolutions" if neither the law (such as for capital increases) nor the articles of association prescribe a stricter form.
However, there are also exceptions:
- A restriction exists, for instance, for shareholder resolutions that must be submitted to the commercial register (such as the resolution on an appointment as managing director or on his revocation): As a rule, a certified copy of the shareholders' resolution must be submitted to the commercial register - and there is no real physical "original" in the case of electronically signed documents. Practical suggestion: It should therefore be agreed with the notary involved in each individual case whether the submission of a document with a simple electronic signature is sufficient.
- A further restriction exists with regard to powers of attorney for resolutions in shareholders' meetings of limited liability companies (GmbHs), for which text form is generally sufficient. However, the notary must ensure that the power of representation in fact (still) existed at the time the resolution was passed. In practice, this proof is only successful if the original of the power of attorney is presented to the notary. For this reason, notaries generally require the presentation of the originals of powers of attorney signed by hand.
2.2 Use of the qualified electronic signature
The use of the qualified electronic signature is sufficient when the law requires the written form, such as in the following cases:
- Although a lease agreement limited to a period of more than one year is not invalid if it has not been concluded in the intended written form but such lease agreement shall be deemed to have been concluded for an indefinite period of time and could be terminated in accordance with the statutory provisions. Practical suggestion: In view of this, it is advisable to use at least the qualified electronic signature for lease agreements.
- Termination agreement concerning an employment relationship.
- Conclusion of a fixed-term employment contract.
- Finally, the qualified electronic signature is recommended for concluding contracts with third parties, for example agreements with suppliers or cooperation partners.
For certain areas the legislator has excluded the use of the qualified electronic signature so that a handwritten signature is still required here. This applies, for instance,
- to dismissals and the issuing of job references,
- to sureties, and
- to promises of debt or acknowledgements.
In general, the use of digital signatures is thus a recommendable method to be able to continue to make legally effective declarations and conclude contracts - even from the home office - especially in times of crisis like these. Especially managers and authorised signatories of start-ups should, though, be aware of the existing restrictions as violations may lead to the invalidity of the contract or resolution concerned. And this can influence not only the operative business but also possible investment rounds, if a corresponding lack of form is discovered by a potential investor during due diligence.
Dr Eva Kreibohm
Lawyer, Notary - registered office Berlin
Dr Gesine von der Groeben