Execution of Escrow Agreements

People executing an escrow agreement do not need to be a directors, secretaries or the CEO/Managing Director of the company.

They simply need to be authorised to execute the escrow agreement.

However, sometimes it can be useful to rely on the methods found in Corporations Act, s127 to ensure that an agreement has been properly executed.

Those methods are:

• A company may execute a document without using a common seal if the document is signed by:
  • 2 directors of the company; or
  • a director and a company secretary of the company; or
  • for a proprietary company that has a sole director who is also the sole company secretary–that director.

• A company with a common seal may execute a document if the seal is fixed to the document and the fixing of the seal is witnessed by:
  • 2 directors of the company; or
  • a director and a company secretary of the company; or
  • for a proprietary company that has a sole director who is also the sole company secretary–that director.

• A company may execute a document as a deed if the document is expressed to be executed as a deed and is executed as above. ¹⁾

A company may execute a document (including deeds) using other methods in other ways but if they use the above methods Corporations Act, s129(5) and Corporations Act, s129(6) (as applicable) provide that a person may assume that a document has been duly executed by the company.

For the purposes of making that assumption, a person may also assume that anyone who signs the document and states next to their signature that they are the sole director and sole company secretary of the company occupies both offices.

For information in relation to the exchange of scanned documents please click here.