House Policy on Digital Deal Documents


Our following ‘house policy’ on what type of electronic signature to use on what digital deal has been developed as part of completing a large number of corporate deals with electronic signatures with a variety of law firms across the UK in recent weeks whilst being mindful of the legal position in both Scotland and England and the practicalities of using different types of electronic signature. Please note that where a number of documents are being sent together, all documents will be signed by the highest level signature as set out in the table. For example, if a shareholder agreement and written resolution are sent together, all documents will be signed with an advanced signature. We do not propose to used qualified electronic signatures unless explicitly requested by parties or as required by law, in each case, consideration will be taken in regards to time, cost and the need of parties.


Types of Electronic Signature


Standard or Simple Electronic Signatures
  • The most basic form of signature which can be used for certain documents but will not be self-proving in Scotland or appropriate for certain documents

Advanced electronic signatures (“AES”)
  • For certain documents under Scots law, an AES must be used for it to be valid (NB: there is no such equivalent requirement under English law, but we have taken the view that given the value of these documents, it would be beneficial for certain documents to be signed using an AES)
  • The four criteria to qualify as an AES are:
    • it is uniquely linked to the signatory;
    • it is capable of identifying the signatory;
    • it is created using electronic signature creation data that the signatory can, with a high level of confidence, use under his sole control; and
    • it is linked to the data signed therewith in such a way that any subsequent change in the data is detectable.
  •  These criteria help prove the authenticity and integrity of the signature and the document being signed.
  •  Meeting these criteria is technically complex and requires the use of a third party service provider such as Docusign. However it means the signature is far more robust and secure than just a standard electronic signature. 
  • In order for a person to sign using an AES, they must be sent a separate access code – this will be sent by email or text by MBM

Qualified Electronic Signatures  (“QES”)
  • This is the highest standard of e-signature. It is the electronic equivalent of the probative (self-proving) document, and its use means that there is a presumption that the document is validly executed.  The difference between a QES and AES is that a QES involves a more rigorous definition which requires the use of a particular type of signature creating device, and the certification by a particular type of third party provider which has been granted special status. A qualified electronic signature is an advanced electronic signature that is created by a qualified electronic signature creation device and which is based on a qualified certificate for electronic signatures.
  • For a signature to qualify as a QES, the signatory must complete an ID check with a third party provider, IDNow, as part of the signing process. This is a live chat ID process that takes time and costs an additional fee. It is for those reasons that we do not propose using this process on a regular basis.

UK House Policy

Type of Document
Scots law governed
English law governed
Comments
Advanced Subscription Agreement Advanced signature Advanced signature No witness needed for Scottish document. Witness only needed for English document if being prepared as a deed.
Board Minute Standard signature Standard signature  
Bond and Floating Charge Advanced signature Advanced signature No witness needed for Scottish document. Witness only needed for English document if being prepared as a deed. Delivery dates to be inserted by a member of the MBM team once document signed and delivery agree
Companies House Forms Standard signature Standard signature  
Debenture (where no
registration at the land
registry is required)
N/A Advanced signature No witness needed for Scottish document. Witness only needed for English document if being prepared as a deed. Delivery dates to be inserted by a member of the MBM team once document signed and delivery agreed.
Dispositions (for transfer of land) Wet-ink only N/A Due to current restrictions by the Land Register of Scotland, we cannot electronically sign leases
Employment agreement - Service Agreement for executive directors Advanced signature Advanced signature 

No witness needed for Scottish document. Witness only needed for English document if being prepared as a deed. Delivery dates to be inserted by a member of the MBM team once document signed and delivery agreed.

General Meeting Notice Standard signature Standard signature  
Intercreditor Agreement N/A Advanced signature Witness needed for English document if being prepared as a deed (we expect it to be signed as a deed). Delivery dates to be inserted by a member of the MBM team once document signed and delivery agreed.
Investment agreement Advanced signature Advanced signature No witness needed for Scottish document. Witness only needed for English document if being prepared as a deed. Delivery dates to be inserted by a member of the MBM team once document signed and delivery agreed.
Leases Wet-ink only Wet-ink only Due to current restrictions by the Land Register of Scotland, the Books of Council and Session and HM Land Registry, we cannot electronically sign leases.
Letter of Appointment for non-executive directors Standard signature Standard signature  
Letter of Consent to appointment as a director Standard signature Standard signature  
Letters of Engagement Standard signature Standard signature  
Letters of Resignation Advanced signature Advanced signature  
Loan Agreement Advanced signature Advanced signature No witness needed for Scottish document. Witness only needed for English document if being prepared as a deed. Delivery dates to be inserted by a member of the MBM team once document signed and delivery agreed.
Minutes of Trustees Standard Signature Standard Signature  
Missives Wet-ink N/A Missives are still being signed “wet-ink” by solicitors as market practice but this may change over time.
Power of Attorney (for a specific commercial deal) Advanced signature Advanced signature No witness needed for Scottish document. Witness needed for English document. Please note that MBM does not provide welfare powers of attorney.
Ranking Agreement (where registration at the Registers of Scotland is required) Wet-ink N/A  
Ranking Agreement (where it does not need to be registered at the Registers of Scotland) Advanced signature N/A Delivery dates to be inserted by a member of the MBM team once document signed and delivery agreed.
s.431 Election Standard signature Standard signature  
Settlement Agreement Advanced signature Advanced signature No witness needed for Scottish document. Witness only needed for English document if being prepared as a deed. Delivery dates to be inserted by a member of the MBM team once document signed and delivery agreed.
Share Application Form Advanced signature Advanced signature No witness needed for Scottish document. Witness only needed for English document if being prepared as a deed.
Share Certificate Standard signature Standard signature For English companies, two directors will be asked to sign.
Share Purchase Agreement Advanced signature Advanced signature No witness needed for Scottish document. Witness only needed for English document if being prepared as a deed. Delivery dates to be inserted by a member of the MBM team once document signed and delivery agreed.
Shareholder Agreement Advanced signature Advanced signature No witness needed for Scottish document. Witness only needed for English document if being prepared as a deed. Delivery dates to be inserted by a member of the MBM team once document signed and delivery agreed.
Shareholder and Subscription Agreement Advanced signature Advanced signature

No witness needed for Scottish document. Witness only needed for English document if being prepared as a deed. Delivery dates to be inserted by a member of the MBM team once document signed and delivery agreed.

Standard Security Wet-ink N/A Due to registration requirements at the Registers of Scotland, this cannot be signed electronically.
Stock Transfer Form Advanced signature Advanced signature  
Tax covenant or deed (for a share purchase agreement) Advanced signature Advanced signature No witness needed for Scottish document. Witness only needed for English document if being prepared as a deed. Delivery dates to be inserted by a member of the MBM team once document signed and delivery agreed.
Written Resolutions/Written Records Standard signature Standard signature  

 

US House Policy

In addition to the above ‘house policy’ on what type of electronic signature to use that has been developed for corporate deals across the UK, we have developed a house policy for transactions involving US law, as noted below. This is simpler than for UK deals, and as eiDAS is only applicable in the UK and EU, the standard/advanced/qualified distinctions are not applicable for US law governed documents.

General rules:

1. Generally, witnesses are not needed for US law governed documents.
2. When executing US documents via DocuSign, the standard execution generally method applies.
3. However, different jurisdictions have different rules – there may be Federal as well as State by State variations and applicable law should be checked in each case.
4. Typically, there are different rules for documents relating to real estate.
5. Also, Federal and State forms and other government documents may be subject to separate additional signing requirements such as notarisation.
6. Most contracts are effective without any signatures being notarised; notarisation is normally only required in respect of documents that are being registered (such as transfers of land).
7. For US corporations, the signature of a director or executive officer may usually be relied upon by the other party.
8. A sample corporate-style signature block is below:
ABC, INC., a [STATE] corporation
___________________________________________ [signature]
By: [Name of person signing]
Its: [Title of person signing; e.g. President and CEO]