Companies – What is an Authorised Signatory authorised to sign?

New Tins – New Worms (Authorised Signatories not authorised to sign).

I can make no apology for returning to the question which more than any other seems to cause problems and frustrations for UK companies in dealing with jurisdictions abroad. It has been noted before, by both lawyers and Company Officers, that we do not seem to be on each other’s wavelengths!

I fully understand that there can often be a conflict between the businessman in a hurry and the lawyer advising that progress be made only cautiously with strict regard to the wording of the law. We lawyers are not trying to slow things down even though it may seem that we are!

I have previously set out section 44 of the Companies Act with regard to the requirements of valid Deed – and noted that a Company can only appoint an Attorney, by a valid Deed.

I have also blogged about the new s47 of the Act which enables a Company by Deed, to appoint an Attorney whose authority can include the Power to execute future Powers of Attorney by Deed all on his/her own (plus a signing Witness), even though that Attorney may not be a Director or Company Secretary or even an employee of the Company at all.

Still with me? Now for section 44 (3) which in typical fashion attempts to clarify the law and succeeds more often than not in confusing everyone

S44 (3) states that “The following are “authorised signatories” for the purposes of subsection (2)— “(a) every director of the company, and “(b) in the case of a private company with a secretary or a public company, the secretary (or any joint secretary) of the company. “

Where is the confusion? This means that the Company Secretary is authorised to sign Deeds and Documents on behalf of the Company, right? Well it would mean that, if the weasel words “for the purposes of subsection (2)” are overlooked.

In every other Country in the World the expression “Authorised Signatory” is used and understood by lawyers and business people alike, to have its dictionary meaning. If I am your Authorised Signatory then my signature stands for yours doesn’t it? Perhaps it does, unless we are dealing with an English and Welsh Limited Company!

Because the proviso “for the purposes of subsection (2)” means that section 3 is merely a definition section to interpret s44 (2) which itself states “A document is validly executed by a company if it is signed on behalf of the company— (a) by two authorised signatories, or (b) by a director of the company in the presence of a witness who attests the signature.”

So you might be an Authorised Signatory, but you cannot validly execute a Company document on your own if you are not a Director!

Do you find room in your heart to pity the poor Notary, who has to explain to the stressed out Company Secretary (who has perhaps been left to run the Company on his own in the factory with all the Directors abroad and who needs to get a Power of Attorney ready for use in Russia TODAY) that just because he is an Authorised Signatory of the Company, he certainly should not be under the impression that he is authorised to sign  for the Company?