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Execution of deeds by companies
22-08-2019

Section 44 of the Companies Act 2006 allows companies to execute deeds under seal or by signature. This article looks at the different kinds of attestation clauses that are required depending on the method of execution. It draws largely on guidance issued by the Land Registry.

Execution by a company under its common seal

Execution under seal is the common law method of execution by corporations, which is preserved for companies by section 44(1)(a) of the Companies Act 2006.

Where this form of execution is adopted, the common seal will normally be affixed to the deed in the presence of the company secretary and one director, or two directors, who attest the sealing by countersigning the deed and describing themselves by their respective offices of ‘secretary’ and ‘director’ or ‘director’ and ‘director’.

If this is done, a purchaser is protected by section 74(1) of the Law of Property Act 1925, which states:

In favour of a purchaser an instrument shall be deemed to have been duly executed by a corporation aggregate if a seal purporting to be the corporation’s seal purports to be affixed to the instrument in the presence of and attested by –

(a) two members of the board of directors, council or other governing body of the corporation; or

(b) one such member and the clerk, secretary or other permanent officer of the corporation or his deputy.

Under section 1(2A) of the Law of Property (Miscellaneous Provisions) Act 1989 introduced by the Regulatory Reform (Execution of Deeds and Documents) Order 2005, merely sealing a document does not make it a deed. It must be clear on the face of a document that it is intended to be a deed. The Land Registry insists that the following attestation clause is used when a company seals a deed, including a deed in one of the forms prescribed by Schedule 1 to the Land Registration Rules 2003.

Executed as a deed by affixing the common seal of (name of company) in the presence of:

Signature of Director:___________________

Signature of [Director][Secretary]:________________

Most companies, however, have articles of association that authorise the affixing of the company seal to a deed in the presence of people other than a director and the secretary. For example, article 49 of the 2006 Act Model Articles for a Private Company Limited by Shares states:

(1) Any common seal may only be used by the authority of the directors.

(2) The directors may decide by what means and in what form any common seal is to be used.

(3) Unless otherwise decided by the directors, if the company has a common seal and it is affixed to a document, the document must also be signed by at least one authorised person in the presence of a witness who attests the signature.

(4) For the purposes of this article, an authorised person is—

(a) any director of the company;

(b) the company secretary (if any); or

(c) any person authorised by the directors for the purpose of signing documents to which the common seal is applied.  

The protection for purchasers provided by section 74(1) of the Law of Property Act 1925 is limited to cases where the seal is affixed in the presence of a director and the secretary or two directors. Where a deed is executed by a company affixing its seal in the presence of persons other than a director and the secretary or two directors, the Land Registry may call for evidence that the people attesting the affixing of the seal are duly authorised by the company’s articles to do so. Where their authority also depends upon a decision by the directors of the company, it may in addition require a certified copy of the board resolution.

 

Execution by a company otherwise than under a common seal

A different method of execution can be used by a company which either has no seal or, having one, chooses not to use it. For deeds executed on or after 6 April 2008, section 44 of the Companies Act 2006 provides:

44 Execution of documents

(1) Under the law of England and Wales or Northern Ireland a document is executed by a company—

(a) by the affixing of its common seal; or

(b) by signature in accordance with the following provisions.

(2) A document is validly executed by a company if it is signed on behalf of the company—

(a) by two authorised signatories; or

(b) by a director of the company in the presence of a witness who attests the signature.

(3) The following are ‘authorised signatories’ for the purposes of subsection (2)—

(a) every director of the company; and

(b) in the case of a private company with a secretary or a public company, the secretary (or any joint secretary) of the company.

(4) A document signed in accordance with subsection (2) and expressed, in whatever words, to be executed by the company has the same effect as if executed under the common seal of the company.

Section 44(5) of the Companies Act 2006 provides protection for purchasers where a document is executed in accordance with section 44(2). It defines a ‘purchaser’ as ‘a purchaser in good faith for valuable consideration’ including ‘a lessee, mortgagee or other person who for valuable consideration acquires an interest in property’.

 

Two officers

Where the deed is executed by the signature of two officers under section 44(2)(a), the Land Registry insists that the following attestation clause is used:

Executed as a deed by (name of company) acting by [a director and its secretary] [two directors]

Signature of Director:__________________

Signature of [Secretary][Director]:________________

Where execution is by a director and the secretary, they must be two separate persons; the same individual cannot sign in both capacities (section 280 of the Companies Act 2006).

 

Single director

Where the deed s executed under section 44(2)(b) by the signature of a single director in the presence of a witness, the Land Registry requires the following attestation clause to be used:

Executed as a deed by (name of company) acting by a director

In the presence of:

Signature of Director:__________________

Signature of witness:________________

Name (in BLOCK CAPITALS):________________

Address:____________________

 

Execution where the director or secretary is also a company

A corporate director or secretary must act through the agency of a real person. That person is required to be physically present at the affixing of the seal and must then attest the affixing with their signature. The Land Registry insists that the following words of execution (amended as necessary) be used where the director or secretary is also a company and the deed is in a prescribed form:

Executed as a deed by affixing the common seal of (name of executing company) in the presence of a director and (name of individual) duly authorised by (name of corporate [secretary/director] to attest the affixing of the seal on its behalf as [secretary/director] of (name of executing company):

Common seal of executing company: ________________

Signature of Director:___________________

Signature of (name of individual) authorised on behalf of (name of corporate [secretary/director]):____________

When the executing company is executing a deed without using a common seal in accordance with section 44(2) of the Companies Act 2006, the Land Registry requires one of the following forms of execution to be used:

(a) – two officers:

Executed as a deed by (name of executing company) acting by (name of individual) duly authorised by (name of corporate director) to sign on its behalf as director of (name of executing company):

Signature of Director:___________________

In the presence of:

Signature of witness:________________

Name (in BLOCK CAPITALS):________________

Address:______________________

(b) – single director:

Signed as a deed by (name of individual) duly authorised by (name of corporate director) to sign on its behalf as director of (name of executing company):

Signature of Director:___________________

In the presence of:

Signature of witness:________________

Name (in BLOCK CAPITALS):________________

Address:______________________

 

Execution by directors/secretaries on behalf of several companies

Where a person who is a director or secretary of two or more companies executes a deed on behalf of them all, they must sign the deed separately for each company (section 44(6) of the Companies Act 2006). The Land Registry insists that an attestation clause along the following lines is used in such cases:

Executed as a deed by (names of executing companies) by (name of first individual signing as director) being a director of each of the executing companies and (name of second individuals) being [a director] [the secretary] of each of the executing companies.

Signature of Director of first executing company:___________________

Signature of [Secretary] [Director] of first executing company:_____

Signature of Director of second executing company:________________

Signature of [Secretary] [Director] of second executing company:_______

In addition, for deeds executed in accordance with section 44(2)(b) of the Companies Act 2006, the following form of attestation must be used:

Executed as a deed by (names of executing companies) acting by (name of director) being director of each of the executing companies

Signature of Director of first executing company:___________________

Signature of Director of second executing company:________________

Signature of witness:________________

Name (in BLOCK CAPITALS):________________

Address:________________

 


Information for subscribers

The above article is relevant to CSP 10.24 ─ Execution of documents.