Yaritza Rodelo
CEO
Easylex
/
Startup Contributor

Signing Off, Digitally

By Yaritza Rodelo | Fri, 04/29/2022 - 10:00

Globalization and technology are taking hold in every field and growing faster every day. If we tried to guess the number of electronic transactions that are taking place at this moment, we wouldn’t be able to come up with an exact number. Aiding these transactions is the digital signature.

Although the digital signature has existed in different countries, such as Singapore, Canada, Germany, since 1997, in Mexico it has existed since 2000 and has undergone legislative changes because in the initial reform the data message was not included in the signature by electronic means.

In 2001, the United Nations Commission on International Trade Law was created. The Commission set the ground rules for different countries regarding digital signatures. Here in Mexico, we have been using this type of signature since the early 2000s, when they were first contemplated in the Code of Commerce.

One area that is benefiting from the use of digital signatures is private enterprise, and specifically, the creation of companies.

Legal procedures in Mexico are famous for being harsh and slow, especially when it comes to starting a new company. In fact, according to Mexico Evalua, a government assessment center, microentrepreneurs spend 492 hours on paperwork per year. A working day lasts eight hours, which represents 60 working days, that is, three months in bureaucratic procedures: 60 days that could be effectively worked and in which the operation was lost.

Creating a company in Mexico, according to traditional processes, takes an average of three to four months. Lost time for a company. These procedures, instead of working as a bridge for entrepreneurs to accelerate their growth through the formalization of their businesses, turn out to be a brick wall for them.

These delays have an effect on and sometimes stop investment in Mexican entrepreneurship.

Previously, digital signatures were not considered valid in Mexico for private affairs, only for public requirements. However, thanks to international laws and the steady rise of digital signatures in the past four years, private affairs are now valid when they are signed with a digital signature. Which leads us to the possibility of starting a company entirely online, using the Advance Digital Signature.

In the past few decades, the use of digital signatures and legaltech in Mexico have risen significantly because of the innovative solutions they bring to the table. The technology introduces the possibility to create and sign an incorporation deed using a digital signature from your home, from any place in the world and at any time.

The digital signature provides speed and convenience, as well as reducing the bureaucratic red tape for which Mexico is famous. Also, the digital signature avoids wasting three months on bureaucratic procedures and allows you to have your company up and running in 15 days, saving you hours in traffic and tons of paperwork. This represents a lot of effort, time and money saved, elements that are worth twice as much in the world of a Mexican microentrepreneur.

Today, the digital signature is widely used in commercial transactions, the signing of private contracts, and to acknowledge receipt of documents in litigation issues, among others. But it was never before contemplated to seal a company’s incorporation with digital signatures.

In our country, an incorporation deed is a document made by a notary public in which the creation of a company is recorded. These documents at the time of their conclusion are elevated to public documents; that is, they have complete legal force. It is comparable to a person’s birth certificate.

If today we can sign public documents between private individuals electronically, what other synergies could we create with technology between individuals and public entities? There are plenty of ideas. There will be many solutions in Mexico that help manage legal complexity and risk electronically, and this solution is the precursor of those to come.

The digital signature is an expression of the will of the contracting party through electronic means. It is the signature that meets the requirements of the law to become the equal of the autograph signature:

  • The signature creation data must correspond to the signatory party.
  • The signature data must be under the exclusive control of the signatory.
  • It must always be possible to detect any alteration of the digital signature after the signature, as well as the integrity of the data message.

The advanced digital signature is accompanied by data encryption. Briefly, there are two types of encryptions: symmetric and asymmetric. In Mexico, the advanced electronic signature used in the creation of companies corresponds to asymmetric. This uses SHA256 encryption algorithms to generate a HASH, which is a unique fingerprint of the document that can be considered as the "DNA" of the signature. The asymmetric encryption is carried out with the public and private keys of the person.

This type of encryption allows greater certainty and security for contracting parties that their documents will be valid and that they are signing them. In the same way, it allows the creators of the documents to validate the identity of each person, since this encryption contains the information of each signer. Thanks to HASH technology, signing with the electronic signature allows you to capture your digital DNA in the document.

Combining legislation and technology provides effective solutions such as the validity of the digital signature in acts between private entities, but there are details we need to clarify.

At the international level, there is no legislative uniformity to create synergy among electronic signatures throughout the world, with the aim of facilitating the use of electronic systems. There are model laws proposed by the United Nations Commission on International Trade Law, which were taken from The Utah Digital Signature Act, created by the state of Utah in 1995, a precursor law on the subject.

In legislative matters, there are still changes to be made. The changes that have already happened provided the possibility to offer great solutions that adapt to the client. The combination of technology and legislation gives us countless solutions. Without a doubt, digital signatures are opening paths and removing barriers in the corporate world of Mexico.

(Regina Osuna collaborated on this article.) 

Photo by:   Yaritza Rodelo