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In Australia, directors are able to sign legal documents on behalf of a company.
In fact, you may be most familiar with director signature blocks.
Below are some sample signature blocks that you've likely seen before.
This sample signature block is for a sole director:
And this one is for 2 directors or one director and one secretary:
Both of the above signature blocks refer to section 127 of the corporations act and below I will explain what this means.
Section 127 allows you to sign your business’s contracts either by:
Also, section 127 also allows the use of a seal.
And here it is, a seal example below:
A seal is not that common nowadays. And if you do use a seal, here are the rules for who can witness it:
But what happens when you cannot get hold of a director to sign a legal document for your company?
Your business contracts should not come to a stand still.
The simple answer is that you can delegate signing of your business contracts to someone other than a director.
Here’s what section 126 of the Corporations Act 2001 says (paraphrased):
"A company can make, vary, ratify or discharge a contract through someone else that’s been given express or implied authority to act on behalf of the company."
And what does the signature block look like for someone signing on behalf of your company? Here it is:
The best thing about this last signature block is that it gives your business flexibility. For example, you can delegate the role of signing client agreements to other workers at your startup.
Do you need help from an Australian business lawyer for startups? Contact us today for help on firstname.lastname@example.org or 1300 478 278 Australia wide or on +61 2 9151 7233 from overseas. We are always glad to help.
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