A EX LISTED Company Secretary writes...
The Companies Act 2006 allows a company to execute documents without a company seal via two directors and the Company Secretary, or a director and a witness. It also allows any person with express or implied authority to enter into a contract. How do companies determine which directors are used especially if they are not Board directors or directors registered at Companies House (and is this via a resolution, their articles or a power of attorney?). Also for documents, such as property documents which have to be signed on a frequent basis where it’s not always practical to have a ‘director’ or two signatures how do companies get around this? I presume having express or implied authority doesn’t mean they can execute a contract/document? Do companies still use ‘corporate directors’? Would anyone be prepared to share a copy of your signing/execution of documents policy?
We use a power of attorney so that a senior manager can sign a deed with a witness, but the signatory provision in the deed needs to note the individual is signing under a POA dated XX, which isn’t always practical, where we’re using dual language contracts (our business is global). Therefore, for non-deeds, we have a simple letter of authority for the same senior manager to sign and as a result we don’t need to amend the signatory provision, hence why we have the separate POA and letter of authority.
We use a Power of Attorney which is approved annually (or more frequently when required e.g.a change of attornies).by the Board at a Board meeting, The four attornies are members of senior management and the PoA specifies the types of documents that they are authorised to sign.
Generally we organise things so we have at least one statutory director available to execute documents that need execution as a deed, so we use the recognised Co Act procedure of one director in the presence of a witness.
If needs be (as I believe is common practice for large corporations) we could set up a “chain” of express authority to sign by means of a suitably worded board resolution authorising the execution by the company of a power of attorney in favour of a named list of attornies with express authority to execute documents as deeds on behalf of the Company. The company obviously needs to determine which non-director attornies should have that authority – we would use it only for senior divisional directors (who are not statutory directors). But it depends on your rules as regards authority to execute documents/enter into commitments.
We don’t use corporate directors.