Execution of a transfer deed by a company with a sole director (Companies Act 2006, s.44)
Kestrel Lane Developments Ltd, a private company, is selling a registered freehold plot in Swindon. It has one director, Farida Mensah, and no company secretary, and it has no common seal. The buyer's solicitor has sent the TR1 transfer for execution by the company as a deed.
How may the transfer be validly executed by the company?
Choose one answer to see the reasoning.
Worked answer
Correct answer A: By Farida signing on behalf of the company in the presence of a witness who attests her signature.
THE RULE TO REMEMBER
A company executes a deed by its seal, by two authorised signatories (directors or secretary), or by one director signing in the presence of an attesting witness.
Execution of a transfer deed by a company with a sole director (Companies Act 2006, s.44)
Section 44(1) of the Companies Act 2006 provides that a company executes a document under the law of England and Wales either by affixing its common seal or by signature in accordance with the section. Under s.44(2), a document is validly executed if signed on behalf of the company either by two authorised signatories, or by a director in the presence of a witness who attests the signature. Section 44(3) defines authorised signatories as every director and, for a private company with a secretary, the secretary. Kestrel Lane has only one director and no secretary, so it cannot use the two-signatory route. Farida must therefore sign in the presence of a witness who attests her signature. The transfer should also be expressed to be executed by the company as a deed and delivered, in line with s.44(4) and the formalities for deeds.
Why B is wrong: Section 44(2)(b) requires a single director's signature to be witnessed and attested.
Why C is wrong: Execution under seal is only one option; a company without a seal may execute by signature under s.44(2).
Why D is wrong: Authorised signatories are directors and (where there is one) the secretary; an ordinary employee is not an authorised signatory.
Why E is wrong: A solicitor's certificate is not a method of execution under s.44.
A little more practice done.
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