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Stuart J
Stuart J, Solicitor
Category: UK Law
Satisfied Customers: 22624
Experience:  PGD Law. 20 years legal profession, 6 as partner in High Street practice
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We have received a Shareholders Agreement which has already

Customer Question

We have received a Shareholders Agreement which has already been signed by the current Shareholders and Managing Director. However the signatures have been witnessed by each other - is that legal?
JA: Because laws vary from state to state, could you tell me what state is this in?
Customer: UK
JA: Have you talked to a lawyer yet?
Customer: Getting some quotes, in the meantime I doing my own research
JA: Anything else you think the lawyer should know?
Customer: Not right now
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Submitted: 1 year ago.
Category: UK Law
Expert:  Stuart J replied 1 year ago.

Is there a dispute over whether the signatures are actually the signatures of the current shareholders and the MD or are they the signatures and that’s not in dispute and it’s just the witnessing which is the query?

Does the document say that it’s a deed, either at the very beginning or at the end “executed as a deed”?

Customer: replied 1 year ago.
It is just the witnessing
Customer: replied 1 year ago.
It says This Agreement has been executed as a deed on the day and year first before written. Executed as a deed by
Expert:  Stuart J replied 1 year ago.

Thank you. It is the last bit with regard to the deed that I was waiting for. I apologise for the delay in getting back to you but for some reason, this has only just popped into my inbox.

If this document is a deed which says on the face of it that it is a deed, then it must have two signatures and the signatures must be independent.

The fact that it is a deed means that it does not need any consideration for the agreement and is enforceable for 12 years.

If it has been incorrectly executed because it has one witness or non-independent witnesses (I don’t know what is the it for that each could witness the other signature) then it does not take effect as a deed but simply takes effect as an agreement which is enforceable for 6 years.

The effect of the document is the same, it is the limitation period which is different.

If this was a document for the transfer of property it would be completely invalid because that has to be done by deed. The Law of Property Act 1925 applies and it must be in writing signed by deed. A deed requires 2 valid witnesses.

In this case, it’s just the shareholders agreement as to what’s happening between shareholders and an agreement doesn’t actually need to be witnessed. Provided there is no dispute over the content, what you have is simply a document of agreement rather than a deed of agreement.

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Kind regards.