An authorized signatory is a person a company has empowered to sign specified documents and act on its behalf. Companies should define that authority in governing documents, a resolution, a letter of authority, or another appropriate written instrument.
Key Takeaways
- An authorized signatory may sign only within the authority the company has granted.
- A job title alone does not always establish authority to sign on behalf of a company.
- Signing authority should identify permitted documents, financial limits, approval requirements, and duration.
- A board or member resolution and an authorized signatory letter can provide evidence of authority to sign.
- The signer should use a signature block that names the company, the signer, and the signer's title.
- Companies should promptly revoke and communicate authority changes when a signer changes roles or leaves.
What Is an Authorized Signatory?
An authorized signatory is an individual formally designated to sign contracts, official documents, or transactions for a company. The British spelling, authorised signatory, has the same general meaning. The person's signature represents the company when the person signs within the authority granted.
Authorization may come from the company's bylaws, operating agreement, board or member resolutions, internal delegation policies, a written authorization letter, or a power of attorney. The controlling source depends on the entity, the transaction, and applicable law. A corporation may act through its board and officers, while an LLC's authority may depend on its operating agreement and whether members or managers control the business.
Directors, officers, managers, employees, and other designated representatives may serve as signatories. However, being a senior employee does not automatically mean that the person can sign every document. A sales manager might have authority to sign routine customer agreements but not leases, loans, or acquisitions.
The company may grant continuing authority or limit the designation to one transaction. It may also require two people to sign jointly. Because a signature can create substantial obligations, the authorization should be specific enough for the signer and any counterparty to understand its limits.
Where Company Signing Authority Comes From
Signing authority usually rests on several layers of company records. You should review those layers in order rather than relying only on someone's title or an informal email.
- Governing documents: Articles, bylaws, and operating agreements may allocate management power and identify which officers, members, or managers may act for the company.
- Board or member resolutions: The appropriate governing body may approve particular signers, transactions, document categories, or financial limits.
- Delegations and letters of authority: An authorized officer may delegate narrower powers if the governing documents and applicable approvals permit it.
- Power of attorney: A company may use a power of attorney when an agent needs defined authority to execute documents or perform other specified acts.
- Transaction-specific requirements: Banks, government bodies, title companies, and counterparties may require their own authorization forms or supporting records.
This authority stack helps determine if the person had actual authority for the document at issue. The broadest source does not necessarily control every decision. A board resolution, for example, may impose limits that an internal signatory list must reflect.
Sloppy practices can also create apparent authority disputes. If a company repeatedly allows someone to negotiate, sign, or present themselves as its representative, a counterparty may argue that the company's conduct made the authority appear genuine. The outcome depends on the facts and applicable law. Clear limits, accurate signatory lists, and prompt notices reduce that risk.
Granting Authorization to Sign for the Company
Start by identifying the decision-maker that can approve the designation. Do not assume board approval is required in every case. A corporation may require board action, while an LLC may require approval from members or managers under its operating agreement. Existing policies may also permit an officer to make limited delegations.
Use the following process to establish signing authority:
- Review current authority: Check the governing documents, existing resolutions, internal policies, and applicable transaction requirements.
- Select the signatory: Record the person's legal name, business title, department, and other information needed to identify the person.
- Define the scope: List the contracts, notices, purchase orders, banking documents, or other records the person may sign.
- Set limits: Include monetary caps, excluded transactions, geographic limits, approval conditions, and any requirement for joint signatures.
- State the duration: Use an effective date and, when appropriate, an expiration date or event that ends the authority.
- Obtain approval: Have the board, members, managers, or authorized officer approve the designation through the required process.
- Document and communicate it: Keep the signed record with company files and provide evidence to departments, banks, or counterparties that need it.
Maintain an authorized signatory list showing current and former signers, their limits, and the records supporting each designation. This list is an administrative tool, not a substitute for the underlying approval. Review it when employees change roles, approval thresholds change, or the company begins a transaction outside its ordinary operations.
Authorized Signatory Letter and Resolution Samples
A resolution records the company's formal approval. It should identify the approving body, meeting or consent date, authorized person, covered documents, limits, effective period, and any joint-signature requirement. The company should prepare and approve it under its own governing documents.
Authorized signatory resolution sample:
Resolved, that [Full Name], serving as [Title], is authorized to negotiate, execute, and deliver on behalf of [Company Name] the following documents: [describe document types or transaction]. This authority is limited to [monetary or subject-matter limits], requires [additional approval or joint signature, if any], begins on [date], and ends on [date or terminating event]. The appropriate officers are authorized to maintain and provide records of this resolution.
A letter of authority communicates an existing approval to the signer or a third party. It should not grant more power than the person issuing the letter can lawfully delegate. An authorization to sign on behalf of the company letter commonly includes the company's legal name, the signer's name and title, scope, limits, dates, and the name and title of the person confirming the authorization.
Authorized signatory letter sample:
To [Recipient]: [Company Name] confirms that [Full Name], [Title], has authority to sign on the company's behalf solely in connection with [documents, account, project, or transaction]. The authority is subject to [financial limit, excluded matters, or required approval] and remains effective from [start date] through [end date or terminating event]. Questions concerning this designation should be directed through the company's established verification process. Signed by [Existing Authorized Officer], [Title], on [date].
These are drafting skeletons, not universal forms. A bank, public agency, or counterparty may require different language, certification, notarization, or its own form. Confirm the requirements before treating any sample as the legal document granting authority for a particular transaction.
How an Authorized Signatory Should Sign
The signature block should show that the individual signs in a representative capacity, not as the individual party. For a company agreement, use the company's full legal name and place the signer's name and title below the signature line.
For signature on behalf sample:
[Company Legal Name]By: [Authorized Signatory's Signature]Name: [Printed Name]Title: [Business Title]
If the document uses the phrase "for and on behalf of," the signer may write: "For and on behalf of [Company Legal Name], by [Name], [Title]." Some organizations use "p.p." before a signature to indicate signing on another's behalf. That convention does not create authority by itself, so a complete company signature block is usually clearer.
When signing for an individual under a power of attorney, follow the power of attorney and the receiving institution's instructions. A common format identifies both parties: "[Principal's Name], by [Agent's Name], as attorney-in-fact." The agent should sign the agent's own name in the stated capacity. Never copy or imitate the principal's signature. Doing so creates issues different from proper delegated signing and may raise the concerns discussed in UpCounsel's article about a false signature on a contract.
Before signing, confirm that the document falls within the authorized category, amount, territory, and effective period. Check for required approvals or a second signature. Signing outside those limits can expose both the company and signer to disputes over enforceability and responsibility.
If you are establishing signing authority or facing a dispute over an unauthorized signature, a business attorney can review your governing documents, prepare the resolution and authority letter, design appropriate limits, and assess the affected contract. You can post your legal need on UpCounsel's marketplace to connect with an attorney. Responses typically arrive within a day, although timing varies by matter.
Evidence of Authority to Sign and Counterparty Checks
A counterparty may request evidence of authority to sign before accepting a contract. This is especially common for significant financing, real estate, banking, ownership, or other high-value transactions. The proper evidence depends on the entity and the document.
Common supporting records include:
- A relevant provision from the bylaws or operating agreement
- A board, member, or manager resolution
- An authorized signatory letter from an existing authorized officer
- A power of attorney covering the specific act
- An incumbency certificate identifying current officers or signatories
- A signatory list supported by the underlying approvals
- A bank or institution's required authorization form
An incumbency certificate generally confirms who currently holds specified company offices or signing positions. Depending on the transaction, the recipient may request signatures, certified records, or additional verification. The certificate does not expand the authority granted by the company's underlying documents.
When reviewing proof, compare the legal entity name, signer's identity, document type, monetary limit, effective dates, and approval conditions. Determine whether the authority permits one signer or requires multiple signatures. You should also check that the person providing the evidence has authority to certify it.
Do not rely on an outdated business card, website biography, or prior contract as conclusive proof. Those materials may support a factual inquiry, but current company records provide stronger confirmation. If the evidence conflicts or the transaction exceeds stated limits, pause signing and request clarification.
How to Revoke or Change Authorized Signatory Status
Revoke or amend signing authority through the process required by the company's governing documents and prior authorization. If the board made the original designation, a new board resolution may be appropriate. If a manager or officer made a permitted delegation, that person or another properly authorized decision-maker may be able to withdraw it.
A written revocation should identify the signer, the authority being withdrawn, and the effective date. Avoid vague statements that leave uncertainty about whether the person retains authority for particular projects or document types.
After approval, take these practical steps:
- Deliver written notice to the former signatory.
- Update the company's authorized signatory list and resolution records.
- Notify banks, vendors, customers, and active counterparties that relied on the prior authority.
- Remove access to contract, banking, purchasing, and electronic-signature systems.
- Retrieve signature stamps, company seals, digital credentials, and authorization documents.
- Assign pending transactions to a replacement signer and document the new authority.
Revocation should address future conduct and access. Review existing agreements separately to determine the effect of signatures made before the revocation. If a former signer acted after authority ended, preserve the relevant authorization records, notices, contracts, messages, and system logs for legal review.
Do not wait for an annual records update when a signatory leaves the company or loses authority. Prompt communication helps prevent third parties from continuing to rely on outdated information. Periodic reviews are still useful for confirming that every active signer has current documentation and appropriate limits.
Frequently Asked Questions
Can Anyone Be a Signatory for a Company?
No, a person must have the capacity to sign and the company must properly authorize that person for the document at issue. The signer does not necessarily need to be an owner or senior executive. The company's governing documents, approval procedures, applicable law, and any institution-specific rules determine who may receive authority.
Who Signs the Authorized Signature?
The designated individual signs the authorized signature using that person's own name. The signature block should identify the company as the contracting party and show the signer's representative title. If two authorized signatories are required, both must sign in the manner stated by the applicable resolution, policy, mandate, or transaction document.
Can a Company Have More Than One Authorized Signatory?
Yes, a company may appoint multiple authorized signatories with the same or different powers. For example, one person may sign customer contracts while another handles banking documents. The company may permit each person to sign alone or require joint signatures for higher-value or sensitive transactions.
Does an Authorized Signatory Need to Be a Shareholder?
No, an authorized signatory generally does not need to own shares or another equity interest in the company. An employee, officer, manager, or other representative may receive signing authority through the company's proper process. Ownership and signing authority are separate concepts, although governing documents may reserve certain decisions for owners.
Does an Electronic Signature Create Signing Authority?
No, using an electronic-signature platform does not by itself give someone authority to bind a company. The person still needs valid underlying authorization for the transaction. Companies should align platform access and approval workflows with their resolutions, delegation policies, monetary limits, and joint-signature requirements.
