Execution Clauses for Companies: What They Are and How to Draft One (UK)

If you run a small business, it’s easy to focus on the “commercial” parts of a deal (price, scope, timelines) and treat signing as a quick formality.

But for a company, how you sign can matter just as much as what you sign.

An execution clause (sometimes searched as an execution clause for a company) is the section that sets out who is signing, in what capacity, and how the document is being executed (for example, under section 44 of the Companies Act 2006, or by a director in the presence of a witness for a deed). If it’s drafted poorly (or doesn’t match what actually happens on signing day), you can end up with a contract that’s hard to enforce, or one that triggers disputes you really don’t need.

Below, we’ll break down what an execution clause is, why it matters for UK companies, and how to draft one that actually works in practice.

General information only. This article isn’t legal advice, and deed and e-signature formalities can be fact-sensitive.

What Is An Execution Clause For A Company?

An execution clause (sometimes called an execution block or signing block) is the part of a contract that explains how the parties sign.

For a company, the execution clause typically covers:

• The company’s legal name (and sometimes its registered number)
• Who is signing (director, company secretary, authorised signatory)
• Whether the document is a deed or a standard agreement
• Whether a witness is required (and who that witness is)
• The method of execution (for example, “by two directors”)

This sounds straightforward, but the detail matters because a company can’t physically sign a document. It can only sign through people who have authority to bind it, and (in many cases) you’ll want the execution wording to align with the statutory methods for companies under the Companies Act 2006.

If you want a good “rule of thumb”: the execution clause should clearly show a future reader (including a court, bank, investor, or buyer) that the company intended to be bound and was properly represented when signing.

Execution Clause vs “Authority To Sign”

These two ideas are related, but they’re not the same:

• Authority to sign is about whether the individual had permission to bind the company (for example, a director acting within their powers, or an employee signing under a delegated authority).
• The execution clause is how that signing is recorded in the contract.

Even if someone genuinely has authority, a messy execution clause can create doubt and arguments later (which is exactly what you’re trying to avoid).

Why Does The Execution Clause Matter So Much For Small Businesses?

For many SMEs, the biggest risk isn’t that you’ll never sign an agreement. It’s that you’ll sign something in a rush, and only find out later that the “signing mechanics” weren’t done properly.

Here’s why a well-drafted execution clause for a company’s contracts matters.

1) It Helps Make The Contract Enforceable

If a dispute happens, one of the first questions is: was there a binding agreement, and who exactly agreed to it?

A clear execution clause supports the paper trail that:

• the company agreed to be bound
• the right people signed
• the document was executed in the intended way

This is especially important when dealing with larger customers or suppliers who expect clean contract admin.

2) It’s Critical If The Document Is A Deed

Some business documents are executed as a deed (and in certain situations, a deed may be required or strongly preferred), such as some guarantees, some property-related documents, and some settlement arrangements.

Deeds have additional formalities compared to “simple” contracts. In England and Wales, a deed generally needs to be in writing, make clear on its face that it’s a deed, and be validly executed and “delivered” as a deed (delivery is often addressed by wording in the document). If you draft deed wording but sign it like a normal contract (or vice versa), you can create real uncertainty.

If you’re dealing with deeds regularly, it’s worth understanding the practicalities of executing contracts and deeds properly, because small technical errors can cause big delays (especially when third parties like banks are involved).

3) It Reduces The Risk Of Internal Governance Problems

Even if the other party is happy, problems can arise inside your company if someone signs something they shouldn’t have.

Your internal rules (often set out in your Company Constitution) may restrict who can sign certain agreements, or require a board decision first.

A well-structured execution clause doesn’t replace your internal approvals - but it does push you to think about them before you sign.

4) It Helps With Due Diligence And Growth

If you ever raise investment, sell the business, or take on significant finance, you’ll likely go through due diligence.

Investors and buyers routinely ask for key contracts, and they often check execution details. Sloppy execution can lead to:

• requests for re-signing
• delays to completion
• negotiation leverage shifting away from you

It’s much easier to get this right from day one than try to fix a pile of contracts years later.

Who Can Sign For A Company In The UK?

In the UK, companies generally sign documents through directors, the company secretary (if they have one), or other authorised signatories.

As a small business, you’ll usually be deciding between:

• Two directors signing (a common Companies Act method)
• A director and the company secretary signing (less common for small companies today, but still recognised)
• A director signing in the presence of a witness (commonly used for deeds, and also a Companies Act execution method)
• An authorised signatory signing under delegated authority (common for day-to-day contracts, but it must be set up properly)

If you’re formalising who can sign what, it’s worth being clear on signing authority so your team aren’t guessing (and accidentally binding the company to something you didn’t approve).

Do You Need A Witness?

Sometimes, yes.

For many deeds, a common method is for a director to sign in the presence of a witness who then also signs. The witness should usually be independent (not another party to the document), and they should witness the signing in a way that meets the relevant legal and evidential requirements for your situation.

If you’re unsure about witness requirements, it helps to check the basics on who can witness a signature so you don’t end up with an invalid execution process.

What About Signing By Email Or E-Signature Platforms?

Many contracts can be signed electronically, and emails can form part of the evidence that a contract exists. But execution still needs to match the contract’s requirements and the relevant legal formalities.

For example, if your document is intended to be a deed and your signing process doesn’t include the required deed wording and execution method (including witnessing where needed), you may have problems later. Remote or electronic witnessing can be particularly fact-sensitive and sometimes contested, so it’s worth sense-checking your approach before you rely on it.

If you want a sense-check on what “counts” as a signature, keep the fundamentals in mind from legal signature requirements - the goal is to make sure what you do in practice lines up with the legal and contractual requirements.

How Do You Draft An Execution Clause For A Company?

Drafting an execution clause for company documents is about aligning three things:

• What the law allows (and requires, if it’s a deed or you’re relying on Companies Act methods)
• What your company’s internal rules require
• What will actually happen when people sign (in real life, under time pressure)

Below is a practical drafting approach you can use.

Step 1: Confirm Whether The Document Is A Contract Or A Deed

This is the first fork in the road.

• Standard contract: usually requires offer, acceptance, consideration, and an intention to create legal relations. Execution is generally simpler.
• Deed: often used where you want a more formal document (sometimes where consideration is absent or uncertain), and it usually requires specific wording and signing formalities.

If you’re not sure whether your agreement should be a deed, get advice early - “fixing” a wrongly executed deed later can be painful and sometimes impossible without re-execution.

Step 2: Decide The Signing Method That Fits Your Company

For many small companies, the most common execution options are:

• Two directors (clean and widely accepted)
• One director + witness (often used for deeds, especially where you don’t have two directors available)

If you have only one director and no company secretary, you’ll usually be looking at the “director + witness” route for deeds.

Step 3: Use Clear, Correct Labels In The Signing Block

Your execution clause should clearly identify signatories and their roles. For example:

• “Director”
• “Director/Company Secretary” (only if true)
• “Authorised Signatory” (only if you have properly authorised them)

Avoid vague labels like “Manager” unless the contract is clear that the manager is authorised to sign and you can back that up internally.

Step 4: Include Witness Details If Required

If a witness is required, include dedicated lines for:

• Witness signature
• Witness name (printed)
• Witness address
• Witness occupation

This seems old-fashioned, but it can save you a lot of back-and-forth if the document is ever challenged.

Step 5: Make Sure The Execution Clause Matches Your Internal Approvals

Your contract might be signed correctly but still cause issues internally if it wasn’t approved properly.

For higher-risk agreements, you may want a board decision (and a written record) before signing. Many businesses document this using a Directors Resolution so there’s a clear audit trail of who approved the deal and why.

Example: Execution Clause For A Company (Two Directors)

Below is a simplified example for a company signing an agreement (not as a deed). This will need tailoring for your document and circumstances, but it shows the structure:

Example: Execution Clause For A Company (Director + Witness, As A Deed)

Again, this is simplified, but a typical structure is:

Getting deed execution right is one of the most common places businesses slip up - usually not because they’re careless, but because nobody tells them the signing rules are different.

Common Mistakes Businesses Make With Execution Clauses (And How To Avoid Them)

Most execution problems are avoidable if you know what to look for.

Mistake 1: Using The Wrong Company Name

This happens more than you’d think - especially when a business trades under a brand name that isn’t the legal entity name.

Always use the company’s full registered name in the execution clause. If you’re contracting under a trading name, you can usually include it in the “parties” section, but the signing should still make it clear which legal entity is bound.

Mistake 2: Listing Two Directors, But Only One Signs

If your execution clause is set up for two directors and only one signs, you may not have executed the contract in the way the document requires.

Fix: draft for the method you will actually use (or include alternatives), and manage the signing process properly.

Mistake 3: Calling Something A Deed, But Not Executing It Like A Deed

This is a classic.

You might see “executed as a deed” in the contract, but then it’s signed like a normal agreement (no witness, no correct formalities). Later, someone argues it isn’t actually a deed, which can affect enforceability and limitation periods.

Fix: decide early whether you need a deed, then align the execution clause and the signing process to match.

Mistake 4: Letting Someone Sign Without Clear Authority

As your business grows, you may have managers signing supplier agreements, NDAs, or client onboarding documents.

That can be totally fine - but only if you’ve properly set up their authority and the contract reflects that.

Fix: document who can sign what, and keep your contract templates consistent.

Mistake 5: Forgetting The “Practical” Signing Admin

Even the best execution clause won’t help if the signing logistics are messy. Common practical issues include:

• witnesses not actually being present (where required)
• pages not being initialled where required
• wrong versions being signed
• signature blocks being edited at the last minute

A quick internal checklist and a consistent signing process can save you a lot of stress.

Key Takeaways

• An execution clause for a company’s contracts sets out how your company signs and who signs, and it can directly affect enforceability and risk.
• Start by confirming whether your document is a standard contract or a deed, because deeds typically require extra wording and signing formalities.
• Common execution methods for companies (including under Companies Act 2006 s44) include two directors signing, or one director signing in the presence of a witness (often used for deeds).
• Your execution clause should match your real-world signing process - otherwise you risk delays, disputes, or the need to re-sign documents later.
• Internal governance matters too: check your Company Constitution and consider documenting approvals with a Directors Resolution for higher-risk agreements.
• If you’re unsure, it’s worth getting legal help early - fixing execution problems after a dispute starts is usually much harder (and more expensive).

If you’d like help drafting or reviewing an execution clause for company documents (or setting up contract templates your team can confidently use), you can reach us at 08081347754 or team@sprintlaw.co.uk for a free, no-obligations chat.