New Rules for Executing Documents
How a document is signed may not seem the most exciting topic in the world but if getting it wrong means it is invalid then the consequences could be immense. The new Regulatory Reform (Execution of Deeds and Documents) Order 2005 comes into force on 15th September.
Anthony Heath, a partner in our Civil Litigation Department says:
"The new rules remove some uncertainties. The Government decided the law was in a bit of a mess. They describe it as a "complicated mosaic of inter-acting statutory provisions". Although most documents are just signed on behalf of a company some more formal documents (known as deeds) require special rules to be followed to make them valid. Some companies have a company seal and use it for executing deeds whilst others have two directors or a director and company secretary to execute deeds without the use of the seal. Many of our local clients will find it wise to have solicitors look over their standard documents particularly if they have deeds of variation or for assignment of rights. The main changes are:
- merely sealing a document will not make it a deed
- a third party can rely on the signatures of two directors to attest a company seal on a deed, as well as
the signatures of one director and the company secretary
- directors and secretaries of more than one company entering into a deed will have to sign separately for
each company they represent.
- companies will be given the same flexibility as individuals to complete the formalities of signing a deed
in advance of being bound by it
- third parties will be able to rely on a solicitor having authority to complete a transaction in all
transactions not just when land is being sold
- companies will have power to delegate the task of execution
- third parties can rely on the attestation of companies acting a director or secretary of another
company when that company executes a deed
For further information call Anthony Heath on 0117 929 0451 or e-mail aheath@metcalfes.co.uk
This press release summarises the law on issues which we believe may be of interest to your business. It is not a comprehensive review of the subjects and accordingly is published without responsibility for loss occasioned to any person(s) acting or refraining from action as a result of information published