Signature Blocks: Consistent, Professional, Easy

Signature blocks are a critical component of high-volume documents used in legal entity and corporate secretarial management (for example, board consents, shareholder resolutions, and stock certificates).

Often, the overhead of managing signature blocks is overlooked. While they are a routine part of creating a document, they can require hours to properly format each signature for the different styles (i.e., joint holders, trusts, individuals). And, when drafted manually, it can drive both cost and risk for business stakeholders.

Signature blocks reflect the ownership, authority, and control relationships of an entity or larger corporate groups. Structured equity interests, powers of attorney, and other arrangements can make drafting accurate signature blocks at scale a complex exercise of managing entity data and business logic. And, executing inaccurate signature blocks can result in the validity of documents being challenged in tax disputes, litigation, and other high-risk business processes.

The Anatomy of Signature Blocks in Corporate Documents

Signature blocks share several common components on most legal documents, including the name of the natural person or legal entity signing, the signer's capacity (e.g., President), and the signing date. There are two main categories of signature blocks in the world of legal entity and corporate secretarial management:

• Appointees (directors, officers, etc.)
• Owners (shareholders, limited partners, etc.).  

Director & Officer Signature Blocks

The diagram below illustrates four common signature configurations for directors and officers that frequently occur when managing a diverse portfolio of legal entities.

Even with only four configurations, there are dozens of different data points and relationships that will determine accuracy. Signature blocks are also subject to increasing regulatory pressure. For example, more and more countries are creating Director Identification regimes as part of ultimate beneficial ownership (UBO) frameworks. Following India and the UK, Australia is the third major economy to require Director Identification Numbers (DINs) on all signed company documents.

Shareholders, Unitholders & Other Equity Holders’ Signature Blocks

Further, signature blocks for entity owners are even more complex than those for directors and officers. This is due to the structuring of legal and beneficial title, voting and non-voting classes of securities, previous entity names, and other significant factors.

Using Business Logic for Accuracy

Entities contain business logic that dictates which parties must sign what documents. For example, if there is a resolution that requires written consent from only holders of a certain class of securities (e.g., “voting shares,” “super voting shares,” etc.), then signature blocks of holders of other classes of securities are not required.

A more common example would be if only certain officers need to sign a document (a certificate of incumbency, for example).  Shareholder or management rights agreements can contain even more complex business logic on signing authority and required consent to take business actions. ‍

The Cost and Risk of Manual Signature Blocks‍

Prior to Athennian, legal professionals had to “discover” the business logic or rules of each entity to determine signing authority and required consent.

For example, if the entity is to raise capital by selling stock, do certain classes of stock have a right of first refusal to acquire shares before new shareholders can? If so, waivers or other such documents to comply with the internal business rules of the entity are needed.

An even simpler, everyday example, has a director on the board recently changed their name following a divorce or marriage?

To successfully draft accurate signature blocks, all of this knowledge and data must be accounted for. Now extrapolate this effort and risk across dozens, hundreds, or even thousands of active entities that are taking business actions throughout the year requiring effective consent. It is easy to see how a paralegal or junior associate could spend many hours and still miss an important detail that invalidates the execution of important documents. This creates financial, operational, and reputational risk for the trusted legal advisor that prepared the documents.
‍

Automate & Tame Signature Block Complexity with Athennian

Athennian's intelligent entity management platform understands the business logic and data needed for automating signature blocks for any scenario at scale. This reduces both cost and risk of inaccurate documents and frees up legal professionals’ time to focus on higher-value activities.

In Athennian, each entity has a profile that structures all of the data and business logic of an entity. That data can be easily updated and maintained. This data and logic then feeds into documents that need to be generated via Athennian’s document automation engine. As a result, law firms and legal departments that use Athennian generate more consistent work, reduce risk, and are more profitable.‍

Athennian generates smart signature blocks that can automatically identify the appropriate style of signature block required for each situation. Some of the elements Athennian evaluates when generating signature blocks are:

• If the parties are entities or persons;
• If they are signing for themselves or if they are representing someone else;
• If the signing parties are individual or collective (joint holders, tenants in common, etc.)

Athennian simplifies generating accurate and consistent signature blocks related to transactional work. Our Document Automation feature leverages all transactional data and generates the appropriate error-free documents depending on the situation with the confidence that no information will be missed.  

Business Value of Automated Signature Blocks and Document Automation

1. Save hours of time: Due to ever-changing updates in signatures required, it is painful to track down, locate and record who needs to sign which documents. Instead of manually searching for required signees and their information, Athennian allows you to easily populate it. Turn a half-day task into just a few seconds.
2. Less human error in document creation reduces risk: Athennian’s signature blocks automate information from the data to ensure that you always have the most up-to-date data. Signature blocks in Athennian provide consistency––creating a high-value, professional experience for signees and legal teams.
3. Start the cycle of clean data: Automated signature blocks and documents pull data from the database to generate key documents. Moving forward, you can reduce human error in data management and be confident in fast and seamless document creation.

We understand that you need to generate professional-looking documents. Athennian empowers you to generate documents with confidence and focus on the critical work that demands your attention.