In cross-border banking transactions, where UK companies are signing English and Scots law security documents, being on top of the two legal systems' different signing requirements can ensure a smooth signing and completion process. While there is some common ground between English and Scots law wet ink signing of traditional security documents by companies, increased levels of electronic authentication of documents have highlighted some key differences between English and Scots law.

Here we look at some of the similarities across, and differences between, the two jurisdictions' respective signing regimes for UK companies executing banking security documents and see how the degree of common ground on wet ink signing disappears when documents are authenticated electronically.

Similarities in wet ink execution…

It is market practice for security documents to be signed as deeds if under English law and as self-proving documents if under Scots law (we explain this standard practice for Scots law documents here). While wet ink execution of English law documents by companies is governed by the Companies Act 2006 (CA 2006), wet ink execution of Scots law documents is governed by the Requirements of Writing (Scotland) Act 1995 (the 1995 Act). And yet, despite the two different regimes, there is some overlap in how companies may sign.

Both English law deeds executed under s.44 CA 2006 and Scots law security documents set up to be self-proving under the 1995 Act can be signed by (a) two directors, (b) one director and the company secretary, or (c) a director plus a witness.

With Scots law's flexibility on who may be an authorised signatory (they do not have to be a director or secretary), Scots law documents can be signed in two additional ways - two authorised signatories and an authorised signatory plus a witness can sign documents so they are self-proving. Scots law also has additional flexibility in its witnessing requirements as the signatory need not sign in the physical presence of a witness (although often does). Execution by common seal is also a permissible method of execution of English law deeds under s.44 CA 2006.

Method of signing

Two directors

Director and secretary

Director and witness

Secretary or authorised signatory* and witness

Two authorised signatories*

English law (s.44 CA 2006)

Scots Law

(1995 Act, Schedule 2, para 5)

* who is/are not a director or secretary

…but very distinct electronic execution

But currently electronic execution is often the preferred method of signing, and the similarities between the two signing regimes end when security documents are signed in this manner.

Whereas the English law security documents (signed as deeds) can be signed by the same combination of signatories (or signatory and witness) applying their signatures electronically, Scots law security documents executed electronically are authenticated by just one signatory. Unlike English law, witnessing of electronic documents is not given any enhanced status under Scots law and does not confer self-proving status on the document. The only way for an electronic document to be self-proving in Scots law is for a qualified electronic signature (QES) to be applied by either a single director, a company secretary, or an authorised signatory. A QES is the most secure type of electronic signature, and involves the verification of a signatory's identity by a qualified trust service provider before it is issued to the signatory. QES is now available as optional functionality with most of the major electronic signing platforms.

Ensuring electronic signings run smoothly

Electronic execution has become widely used in response to pandemic-related restrictions and is likely to continue to be the signing method of choice going forward. One practical advantage of QES-execution of Scots law security documents is that it requires the authentication of only one signatory, and once that signatory has been verified and issued with a QES the signatory can use their QES for further deals without having to repeat the verification exercise for quite some time (2 years for some platforms). For companies or lenders likely to be involved in regular banking transaction activity in the near future it could make sense, and smooth document signings, to have their authorised signatories obtain their QES early on.


Lindsay Lee

Senior Associate