Execution of Deeds by Corporations
|Circular No. 03-08 (CR)
A deed executed by a limited company shall have been executed in accordance with its articles of association and sealed with the company seal.
In perusing title documents executed by corporations, solicitors would check if they are executed in accordance with the relevant articles of association and may even demand to see the relevant board resolutions in order to establish due execution.
In the past, disputes on title or even litigation might arise because of uncertainty on authorization and/or inconclusive evidence of due execution by corporations. The Legislative Council has recently amended the law as regards the presumption of due execution. For the purposes of proof of title for property transactions entered into on or after 9 May 2003, any deed shall be presumed to have been duly executed, unless the contrary is proved, if the signatory/ies could have been authorized under the relevant articles of association. For deeds executed not less than 15 years, the presumption is conclusive.
The said amendment will expedite the conveyancing process by curing formal title defects which are not substantive. For details, please refer to section 9 of the Law Amendment and Reform (Miscellaneous Provisions) Ordinance 2003 (14 of 2003) which was gazetted on 9 May 2003.