Deeds are documents that are often used to establish or vary trusts and self-managed superfunds. A deed may only be varied by another deed.
Proper execution of a deed is crucial. Failure to properly execute a deed may lead to the desired action being ineffective.
What are the requirements for individuals?
In New South Wales the following requirements must be satisfied to establish a valid execution:
- Have an independent witness that is not a party to the deed;
- It must be in writing on paper; and
- It must be delivered.
What are the requirements for companies?
The execution of a deed by company is further regulated by section 127 of the Corporations Act 2001 (Cth) (“the Act”), which provides:
A company may execute 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 who is also the sole company secretary – that director.
The Act does not specify how a sole director company with no secretary may execute a deed. In those circumstances, it may be necessary to review the company constitution to find the answer. It is important to note that many financial institutions will only recognise a deed to be validly executed by a sole director company if the director who is also a secretary or another person who is the secretary signs the deed.
Should you have any questions in relation to the execution of deeds, please do not hesitate to contact our team of lawyers at The Quinn Group on (02) 9223 9166 or submit an online enquiry form today.