Under the Corporations Act there a number of ways in which a company can sign documents (including deeds). Specifically, the Act provides that a company may sign a document without using a common seal if the document is signed by:
(a) 2 directors of the company; or
(b) a director and a company secretary of the company; or
(c) for a proprietary company that has a sole director, then that director, provided he/she is also the sole secretary.
If a company signs a document in this way, people will be able to rely on the assumption that the director is in fact a properly appointed director of the company.
Since changes to the Corporations Act, companies no longer have to affix a seal to documents. However, if a company uses a common seal when signing documents, then the company may stamp the seal on the documents if the stamping of the seal is witnessed and signed by:
(a) 2 directors of the company; or
(b) a director and a company secretary of the company; or
(c) for a proprietary company that has a sole director, then that director, provided he/she is also the sole secretary.
Interestingly, the Corporations Act does not contain reference to how a single director company must execute documents if there is no appointed secretary. The Corporations Act does state that the methods of executing a document described above in this article are not the only ways in which a company may execute a document, but no further examples are given in the Act. As a single director proprietary company is not required to have a secretary under the Corporations Act, it is logical that when such companies are executing documents only the single director should sign.
It is very important that when a company enters into agreements or signs important documents that the execution of such documents is property performed. Failure to do so can, in some circumstances void the transaction.
