Execution of Instruments and what’s changing under Section 7 of The Corporate Governance, Enforcement and Regulatory Provisions Bill 2024.

The Companies (Corporate Governance, Enforcement and Regulatory Provisions) Bill 2024 was singed into law on the 12th November 2024 and the commencement order is due to take effect on the 3rd December 2024.

One such change taking effect on the 3rd December 2024 is the Insertion of S43A - Execution of instruments consisting of several documents in like form.

What is the wording of the update:

Execution of instruments consisting of several documents in like form

7. The Principal Act is amended by the substitution of the following section for section 43A:

“43A. (1) Subsections (2) to (4) apply in relation to a company notwithstanding any provision of—

(a) section 43(2)(b) or (3), or

(b) the company’s constitution.

(2) As respects an instrument to be made or executed by a company, other than an instrument to which subsection (3) applies, such an instrument may consist of several documents in like form if—

(a) one such document is signed by a person referred to in section 43(2)(b)(i),

(b) one such document is signed by a person referred to in section 43(2)(b)(ii), and

(c) one such document has the company’s seal affixed to it.

(3) As respects an instrument to be made or executed by a registered person in exercise of the powers of a company, such an instrument may consist of several documents in like form if—

(a) one such document is signed by the registered person,

(b) one such document is signed by a person referred to in section 43(2)(b)(i),

(c) one such document is signed by a person referred to in section 43(2)(b)(ii), and

(d) one such document has the company’s seal affixed to it.

(4) An instrument consisting of several documents that comply with subsection (2) or (3) shall be valid and effective for all purposes as if the documents were, taken together, one document.”.

What does this mean for my company:

The amendment, will reinstate the ‘interim fix’ introduced in the Companies (Miscellaneous Provisions (Covid-19) Act 2020, the execution of documents by a company under seal which was discontinued on the 31st December 2022. This will again allow a company to execute documents under its common seal on separate counterparts, with signatures on separate pages and then to be regarded as a single document.

Once it comes into force on the 3rd December 2024, a company’s seal and the signatures of those who countersign it may be on separate copies of the relevant agreement or deed with the aggregate considered as one instrument.

This provision will apply to a company “notwithstanding any provision of S43(2)(b) or (3) or the companies constitution” it will be an alternative to any clauses set out in the companies constitution regarding the affixing of the company seal.

It is also important to note that under S43A(2), where a company has specified in its constitution that only one countersignature is required when affixing the seal, that company must obtain an additional countersignature if it wishes to rely on Section 43A.

In the coming weeks we will break down areas of interest in the above sections which will affect accountants and agents on a day-to-day basis.

Please note that the information provided here serves as a guide, and for a more comprehensive understanding, we recommend referring to the Act directly.

If you would like to discuss any of the above with a member of our team please contact a member of staff at 0539100000.