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There are certain situations, however, when backdating is acceptable; however, the parties involved must agree to it.There was a spate of backdating stock options in the 2000s, mostly at technology firms that rely heavily on stock options for executive compensation, but also at some companies not in the tech sector.However, even if it is an agreement that could have been made orally the lawyer preparing the agreement has no way of knowing whether that is actually the case and that the agreement to be fully documented by him is the one that was reached at the earlier date.He also has no way of knowing whether the backdating will be scrutinized by a regulatory authority or even a Court.This is a fraud on the tax authorities, a criminal offence and is likely to get the lawyer who prepared the document disciplined by his regulator and possibly also charged as a co-conspirator.For obvious reasons, any request to backdate a document for these reasons should be flatly turned down.
The best way to achieve this is to state openly in the document that it is recording an earlier oral agreement made on, and so is with effect from, a particular date and then date it the actual date it was signed.
I am sure that from time to time we have all come across the vexed question of backdating documents.
A client or, in the case of an in house lawyer colleague (who for the purposes of this article will also be considered a client), asks you to prepare a document and then your heart sinks as he says “oh and it has to be dated” and gives a date which has already passed.
The position is then clear to all who subsequently look at the document.
Another way is to state at the beginning of the document that it is made “as of” the required date.