The Electronic Transactions Act

Use of Electronic Records in Singapore

The Companies Act in Singapore recognises the use of electronic records. Companies in Singapore (read how to register a Singapore company) can maintain records (such as the register of members) in an electronic form. The Act further prescribes that the company records can either be kept in a hard copy form or an electronic form.

Retention of Electronic Records

Where the rule of law requires electronic records to be retained, the electronic records are valid only if the following conditions are fulfilled:

1. The information is accessible and can be used for subsequent reference,
2. The electronic records are retained in the form in which they were originally generated, sent or received, and
3. The records retain details such as the origin and destination of the records, the date and time when they were sent or received.

Electronic and Digital Signatures

The ETA 2010 of Singapore recognises the use of electronic and digital signatures.

Please keep in mind that electronic signatures are different from digital signatures. An electronic signature is an acknowledgement provided in an electronic format that a business can use to demonstrate acceptance by a party and that can electronically be used to authenticate the party involved. Electronic records are valid and enforceable by law in Singapore. There is no single unique definition of an electronic signature: and an e-signature can take the form of a click of an accept button on a website where the user accepts the terms and conditions, a facsimile or scan of a physical signature, signing on a touchscreen with a stylus, or agreeing to any terms and conditions by means of electronic communication such as e-mail, etc.

On the other hand, a digital signature is a type of an electronic signature which adds an additional security layer by the use of an asymmetric cryptosystem and a hash function. A digital signature is issued with a Digital Signature Certificate (DSC) which contains details of the user’s identity. This includes his or her name, address, email, date the certificate was issued, name of the certifying authority. Businesses use digital signatures when transacting with government authorities, for instance, filing tax returns, filing forms with the Accounting and Corporate Regulatory Authority (ACRA), etc.

A business can save cost by the use of electronic signatures as compared to the traditional handwritten signatures. A document can be sent by means of e-mail and can be signed in a few minutes. This is very useful for businesses that have a global presence.

The ETA gives electronic signatures and its use the same status as written signatures. However, the Act states that signature should be

1. Unique to the person using it;
2. Capable of identifying the person; and
3. Under the sole control of the person using it.

Electronic Signatures in Corporate Documents

Directors of Singapore registered companies can approve a company resolution passed at a Board meeting by affixing their digital signatures to it. The signature displays the date of signing and is especially convenient in cases where the company maintains all its records electronically.

Electronic IDs for Government Interactions

In September 2016 the Singapore government announced the introduction of CorpPass, a single digital identity that businesses having a Unique Entity Number (which is an identification number issued to an entity to transact with the government) in Singapore can use for all interactions with the government. The CorpPass ensured additional privacy and security and replaced:

1. Singapore Personal Access (SingPass) – a digital ID used by Singapore citizens, permanent residents, EntrePass and Employment Past holders, etc.;
2. EASY – e-Services Authorisation System (EASY) which allows businesses and companies to provide access to employees or to any third party for executing any e-services on their behalf.

Companies and businesses in Singapore have to use CorpPass as a single digital identity to access their business transactions. With the introduction of CorpPass the multiple logins through SingPass and EASY are no longer necessary. Entities such as joint ventures, trust funds, individuals, etc that are not eligible to use CorpPass will continue using their SingPass accounts to transact with the government.

Electronic Contracts

Section 11 of the ETA explicitly states that contracts can be entered into electronically. This provision states that all electronic contracts are legally valid and enforceable by law in Singapore. The Contract Law in Singapore outlines the general rules for the formation of a contract such as an offer and acceptance of a contract, intention to create a legal and binding relation between the parties, etc. These rules are also applicable to e-contracts.

All businesses in Singapore must keep in mind that electronic contracts are legal provided they follow and apply the general contract laws and the specific rules related to electronic contracts.

Note the following provisions of the ETA when entering into e-contracts:

1. Party Autonomy: The Electronic Transactions Act states that parties to a contract can exclude the use of electronic records, electronic communication or electronic signatures in any contract by agreement and the parties can impose additional requirements to the form or authentication of the contract or transaction by agreement.
2. Dispatch and receipt of an electronic communication: An electronic communication is dispatched either at the time it leaves the sender’s information system which is under the sender’s control or at the time of receipt by the receiver (if it does not leave the sender’s information system e.g. in case of access to a file stored on the sender’s information system). The time of receipt is the time when the receiver can retrieve the electronic communication.
3. A contract with or between automated message system(s): A contract between an automated message system and a natural person or between any two automated message systems is considered valid. The validity cannot be denied only on the basis that no natural person reviewed the contract.

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