Electronic signatures as a mechanism to avoid forgery

The reform to the Companies Law of March 15, 2023 in Ecuador contemplates a new possibility with respect to corporate acts.  In its third general provision-A, it establishes the possibility that limited liability companies and corporations may be incorporated in an alternative way, through a public deed or by means of a private document that will not be subject to any notarial diligence and likewise, any corporate act subsequent to incorporation. 

In the face of this alternative, several inconveniences arise with respect to the verification of the subscribers of such acts. The creation of a public deed used to work as a control mechanism to avoid forgeries, which although it does not replace the control exercised by the relevant entities, it contributed to it, since a third party verified the issuance of the document. 

Nowadays there is a risk and the control work must be increased due to the ease of forgery. Although it is a step forward to allow the user to choose, alternatives must be sought to avoid uncertainty in a private document. One option is the electronic signature, since it is equivalent to the handwritten signature and allows the identity of the signer to be linked with the advantage of being a personal, protected file that cannot be forged. Thus, it will depend on the holder of the signature the safeguard of the file and therefore the risk of third parties subscribing documents in his name, but in principle the documents subscribed with electronic signature will be understood as those of the person who appears in the document.

By Atty. Paul Vinces Franco, FexLaw