Who can sign on behalf of a company?

If your business has dealings abroad and needs to execute a legal document, the services of a notary such as Vanner Perez Notaries (vpnotaries.co.uk) is essential. The complexities of company law in England and Wales means that the answer to the question ‘Who can sign a document on behalf of a company?’ is not as straight-forward as it may at first appear.

Typically this issue arises when a company needs to execute a legal document that is going to be used abroad. This might be a power of attorney, a contract, or an application to a foreign court and, whilst electronic signatures are acceptable in some instances, the vast majority of legal documents will still need to be executed in the traditional manner– by putting pen to paper.

The current law that governs companies in England and Wales is the Companies Act 2006, and this legislation has sought to simplify the manner in which a company executes documents, although there is still room for improvement.

Although the Companies Act defines the Company Secretary of a public or private limited company as an “authorised signatory” (s.44 (3)), the Act also states that two authorised signatories are required to execute a document, or just one director ‘in the presence of a witness’. So, whilst a Company Secretary is an authorised signatory, they don’t have sufficient authority to execute documents on their own – they’ll always need one of the directors to sign at the same time, which causes considerable frustration, particularly if the board of the company is international as is so often the case for large, modern, businesses.

Perhaps the easiest and quickest way for a company to execute a document is for a director of the company to sign the document in the presence of an independent witness. The witness can be anybody at all, as long as they are over 18. Once a document is signed in this manner, it is validly executed as a deed and thus may be considered as binding upon the company.

It should be noted that It is also possible for a company to execute a document by the signature of two authorised signatories together with the use of the company’s seal, on the proviso that there is a resolution of the board of directors authorising the use of the company seal.

If the logistics of having directors sign all of the documents proves to be too complex a company might consider granting a power of attorney to one or more of its employees, thus authorising them to sign documents on the company’s behalf. If this power of attorney is executed in accordance with the rules stated above, the company can then act through a member of the team based in the UK. Indeed, if the initial power of attorney specifically allows for it, the attorney may grant further powers of attorney to other people on behalf of the company. The Land Registry has a useful guide that deals with all of this in some detail was prepared by the Land Registry which can be found here.

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