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Types of Authorized Signatories
In business and contracts, there are different types of signatories who are given the right to sign a legally binding document on behalf of another party or an organization.
Keep reading as I will provide you with the most common scenarios where a person is given the authority to sign on behalf of another.
I have written a detailed post on the meaning of authorized signatory in case you would like to read more on the topic, so be sure to check it out.
Let’s start with the first type of authorized signatory: the corporate authorized signatory.
Corporate Authorized Signatory
A corporate signing officer is a person who is designated by a company or corporation to sign on its behalf.
Typically, a corporate signing officer can be a company director, officer, high-ranking manager, or an employee designated by the company.
Typically, companies have internal policies and procedures for appointing a signing authority and delegating powers to individuals authorized to legally bind the company in contracts.
Corporate signing officers typically sign documents such as contracts, order forms, shipment documents, notices, undertakings, or other types of legally binding documents.
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LLC Authorized Signatory
In the United States, limited liability companies have specific rules applicable to them to appoint LLC signing authorities on their business bank accounts.
A limited liability company can grant signing authority to a managing director or its members, such as the president, to sign legally binding documents such as contracts, partnership agreements, loans, or other legal documents.
Banking Authorized Signatory
Another type of authorized signatory is a person who is has been given authority to manage the company’s bank account.
Individuals with banking authority are also called signing authorities in most cases.
When doing transactions on a personal or business bank account, the banks will always ensure that the person acting on behalf of the account holder is a signing authority.
Different banks in different jurisdictions may have different levels of permission on a business bank account allowing a person to do things like:
- Sign checks
- Obtain account balances
- Get transaction history
- Close the account
The authorized signatory on a bank is essentially a person who has been given a specific level of permission to manage the account.
Trading Authorized Signatory
In the brokerage industry, when a trader is given the right to trade on behalf of his or her client, we’ll refer to the trader as having “trading authority” or being an “authorized signatory”.
This means that an investor or client grants the authority to a broker or agent to trade on the investment account.
In some cases, the broker will be given a full trading authorization whereas in other cases it will be a limited trading authorization.
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Takeaways
So there you have it folks!
An authorized signatory is a person given the authority to sign on behalf of someone else or another entity.
In business, there are typically different types of authorized signatories acting on behalf of a company where they have different roles and permissions.
In this post, I have presented an overview of the main types of signatories acting on behalf of companies, corporations, limited liability companies, or other entities.
Now that you know about the different types of authorized signatories, good luck in your research!
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