With social-distancing measures set to remain in place for months to come, the simple act of printing and signing legal documents has become more challenging for companies. As company directors get to grips with having the always-on printing and scanning facilities of the office locked down, it is important to be clear about what you can (and cannot) do when a document needs signing.
This post provides a refresher on the approach you should take when signing documents for your company, and flags the key issues to bear in mind for any company that needs to sign a document during the COVID-19 pandemic.
Signing documents – Do the usual rules still apply?
Yes, very much so. Although the COVID-19 pandemic has led to emergency legislation in many areas, the rules on signing company documents remain unaffected. Fortunately for companies, the existing law offers a range of flexible options for signing most legal documents, but it is important to be particularly mindful of these when signing anything for your company during lockdown.
Use the 5 steps below to ensure you follow the right process when signing any documents for your company during lockdown:
1. Check who has power and authority to sign for your company
If your company is one of the many that uses the default model articles of association, your directors have general power to manage its business, including the power to sign most documents for and on behalf of your company (or delegate authority to sign to others). If your company has a shareholders’ agreement, you should check this for any restrictions on who can sign documents. For further guidance, see Who can sign documents on behalf of my company.
You should also check there are no restrictions on the use of electronic signatures in your articles of association and any shareholders’ agreement. If your company uses the model articles of association, there are no such restrictions.
2. Check the terms of your document
Read through the document or contract you are signing and see if there are specific requirements for how it should be signed (or “executed”). If there are any, you must follow these.
3. Check if the document is a deed
It should be easy to identify a deed, as it will require either the signature of two directors, or the signature of a director in the presence of a witness.
The signing of documents becomes more complex where your company is signing a document as a deed, particularly during a lockdown, due to the strict requirements for deeds to either be witnessed or signed separately by multiple officers of your company. See (5) below for further guidance on signing deeds.
4. If the document is not a deed, sign it
Unless there is anything in particular you have to do under points (1) or (2) above, you can either:
- print the document, sign it by hand, and either post a copy to the other party or send an email scan or clear photo of the signed version. You can download smartphone apps which act as a scanner and ‘flatten’ a photo of a document, if desired. This remains the preferred method for signing any legal document remotely, but depends on you having printing and scanning facilities at home; or
- sign the document using an electronic signature. A range of electronic signature options exist. You could:
- Use one of the many electronic or pdf signature programs and apps (such as DocuSign) to sign the document. This is the preferred method of electronic signature, as it creates a clear electronic and email paper trail to show that the document has been signed by an authorised person.
- Paste a jpg (or similar) image of your signature into a document. This is acceptable legally, but you should ensure the jpg image of your signature is only stored and used by you.
- Type your ‘signature’ into the document, by inserting your name where appropriate or using a touchscreen on a phone or tablet. This is acceptable legally, but is the least desirable of the three options listed here. If you are signing a document in this way, for evidential purposes it would be advisable to include a cover email or other written record confirming that you have signed the document and agree to its terms.
If you don’t want to sign yourself, or are unable to do so, you can authorise another person to sign. This would ideally be a director, manager or senior employee who has printing and scanning facilities at home. You can use our template board minutes to authorise another person to sign a document on behalf of your company (or our template sole director resolution if your company only has one director).
5. If the document is a deed, exercise caution
If you fail to sign a deed correctly, it can be declared void, so it is important to get things right.
In normal circumstances, the best way to sign a deed is to have two directors (or a director and company secretary) print and sign the same copy of the document, or to have one director print and sign in the presence of an independent witness. Both of these methods pose challenges during a period of lockdown and social-distancing.
Electronic signatures are potentially acceptable on a deed, but this depends on the form of the electronic signature and remains an untested and evolving area of the law.
If signed by one director in the presence of a witness
If the deed is to be signed by a director in the presence of a witness, the witness must be physically present when you sign the document. Although there is nothing to prevent you from having an immediate family member witness a deed, the purpose of having a witness is to provide an independent record of your signature, so a close family member is usually not recommended.
Additionally, the law does not currently permit remote witnessing via a video link or similar. Whilst lockdown continues, if you are signing a deed that requires witnessing, the most prudent option may therefore be a nearby neighbour or colleague who can witness your signature on the doorstep (from a safe 2m distance). In either case, you will likely need a printer to create a single hard-copy document for signature by you and the witness.
If signed by two directors (or a director and the company secretary)
If your company has two directors, or a secretary, signing by this method avoids the challenge of finding a suitable witness during lockdown. The safest approach is for both signatories to sign the same single hard-copy of the document. This may require the directors (or secretary) to post a printed deed to each other, so that they can sign the same hard-copy version.
Some deeds will include terms which allow you to sign it “in counterparts”, which means different copies of the same document can be signed by each signatory. Check the wording of the deed. This may permit two directors to sign separate copies of the same original document (but note it will not allow a director and a witness to sign separate copies of a document).
Whatever method you use, whilst lockdown and social-distancing continues, signing deeds is likely to present practical hurdles for any company. As the law is untested in the current circumstances, the above guidance recommends the most cautious (but practical) approach. If you are in any doubt about how a deed should be signed during the COVID-19 pandemic, you can use our Ask A Lawyer service to seek specific advice suited to your own circumstances.
Harry is General Counsel and Company Secretary of FromCounsel, the specialist corporate legal resource trusted by top global law firms and FTSE 100 companies. Before joining FromCounsel in 2021, Harry was a member of Sparqa’s editorial team for over 4 years, having previously practised as a corporate solicitor for 6 years at Farrer & Co. Harry regularly contributes his expertise to the blog, focusing on corporate and commercial law.