execution of documents

The Companies Act 2006 (Commencement No. 5, Transitional Provisions and Savings) Order 2007 brings into force section 44 of the Companies Act 2006 which deals with the methods available for companies to sign documents.

The law isn’t changing a great deal and directors will still be able to sign agreements on behalf of a company in the normal way.  At some point, it is likely that you have come across the expression “signing a document as a deed” and it is in relation this where the law will change slightly from 6 April 2008. 

From 6 April 2008 a Company will be able to sign a document as a deed in one of three ways:

• by affixing its common seal; or
  
  
• by two “authorised signatories” executing the document; or
  
  
• by a single director executing the document in the presence of a witness.

You will note that the Companies Act 2006 introduces the concept of an “authorised signatory”.  Authorised signatories automatically include all appointed directors of a company but will also include the company secretary if one has been appointed (see below in relation to company secretaries).  This concept does not allow you to extend authorised signatories to a wider class of people.

It is important to note that section 44 of the 2006 Act does not have retrospective effect, so the provisions as stated in the Companies Act 1985 still apply in relation to documents executed prior to 6 April 2008.