3 WAYS FOR A COMPANY TO VALIDLY SIGN A CONTRACT

Under Section 127 of the Corporations Act 2001, a company can be bound by: two directors signing, a director and the company secretary signing, or a sole director who is also the sole company secretary for proprietary companies. Under Section 126, any officer, employee, or agent with express or implied authority can also sign contracts that bind the company.

Yes. A company secretary can sign as one of the two required signatories under Section 127. They may also have authority to sign under Section 126 if their role carries implied authority or they have been specifically authorised by a board resolution. However, a company secretary acting alone generally does not have the authority to execute major commercial contracts without additional authorisation.

One director signing alone satisfies Section 127 only if they are the sole director and sole company secretary of a proprietary company. For companies with multiple directors, a single director cannot execute under Section 127 alone. They may still bind the company under Section 126 if they have been separately authorised, for example, by a board resolution or the company’s constitution.

To sign on behalf of a company under Section 127, ensure the contract execution block states the company name and ACN, the signatories sign in their correct capacity (Director or Company Secretary), and the required number of signatories are present. The completed document with all signatures is the binding executed contract.

For ordinary contracts executed under Section 127, no witness is required. A witness signature on a contract is only required when the document is a deed, or when the company’s constitution or the contract itself requires witnesses. Deeds require that each signatory’s signature be witnessed by someone present when the signing occurs.

For commercial contracts and deeds, a witness must be present at the time of signing, be over 18 years of age, and not be a party to the document. There is generally no requirement for the witness to be a lawyer or JP for ordinary commercial contracts, though some document types, such as statutory declarations, require an authorised witness.

Yes. The Corporations Act supports technology-neutral execution, meaning a company can satisfy Section 127 using electronic signatures. The electronic signature must identify the person, state their capacity, and indicate their intention to sign on behalf of the company. Platforms such as DocuSign and Adobe Sign are widely used and legally accepted for company contract signing in Australia.

An authorised signatory of a company is a person who has been given authority to sign contracts on the company’s behalf, either by the company’s constitution, a board resolution, a Power of Attorney, or through their role and implied authority. An authorised signatory may or may not be a director or company secretary.

Yes. Our contract lawyers in Sydney draft and review business contracts of all types, from simple service agreements to complex commercial arrangements. We can also advise on your company’s signing authority arrangements, review your constitution, and assist with any contract disputes that arise. Call (02) 8386 8592 for a free initial consultation.