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13th January 2012

How does a company sign a document?

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It is one of the delights of the law that such questions can still be debated by the best legal brains. The Court of Appeal was asked to resolve the issue in a case concerning a notice given by a company tenant who sought to claim, with other individual tenants, the freehold of flats in a west London property.

[1] The process of claiming the freehold starts with the tenant giving a notice which must be “signed by the tenant by whom it was given”.[2] The tenant was a company. The notice was signed. Under the signature was the manuscript description Director.

The only statutory guidance is to be found in the Companies Act: “A document is validly executed by a company if it is signed on behalf of the company (a) by two authorised signatures, or (b) by a director of the company in the presence of a witness who attests the signature.” [3] The “authorised signatories” are directors and secretary.

The notice in this case was not required to be a deed; it was required to be signed, not executed; in the words of the judge, “one does not naturally speak of a simple notice, however important its effect, which requires no more than a signature, as being executed.” Did the requirement of the Companies Act, relating to the execution of documents have to apply here?

Yes, said the Court of Appeal. Where a company is required to sign a document the formality set out in statute must be applied: the Notice here was invalid.

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[1] Hilmi & Associates Ltd –v- 20 Pembridge Villas Freehold Ltd [2010] EWCA Civ 314

[2] Leasehold Reform Housing and Urban Development Act 1993, s99(5)

[3] Companies Act 2006, s43