The short version
- Name the entity above the signature. A block reading entity name, "By:", signature, printed name and title makes the company the party; a bare signature can make the signer the party instead.
- Actual authority comes from the bylaws, an operating agreement or a resolution. Apparent authority comes from what the company has let the other side believe. Either binds the company, and only one of them is visible from outside.
- Titles are a weak proxy. A president committing to an ordinary purchase is usually safe to rely on; a vice president committing the company to sell its business is not.
- On anything material, ask for a secretary's certificate naming the signer and attaching the resolution. It costs the other side an hour and removes the entire argument.
The block that keeps you out of the contract
An agent who signs for a principal the other side knows about is not a party to the resulting contract. The principal is. That protection depends on the document showing which principal. Where the writing does not identify the company, the signer can be treated as a party in their own right — the rule agency law applies to an unidentified principal, and the rule the UCC applies to instruments in § 3-402(b), where a representative is liable unless the signature unambiguously shows it was made on the company's behalf.
The lines a signature block has to have
Signature block, corporate party
The failure mode is mechanical rather than legal. Someone reformats a template, the entity line goes with the formatting, and a name over a rule is what survives. Nobody notices, because nobody reads the block again until there is a dispute. The question then is whether the other side had notice they were dealing with a company at all, and "they knew we were a business" is a far weaker answer than a line of text on the page.
Your title is a claim, and it should be a true one
In a corporation, offices are not fixed by law. Delaware's General Corporation Law § 142 says a corporation has such officers with such titles and duties as the bylaws or a board resolution state, and most states follow that shape. "Vice President" therefore means whatever that company's bylaws say it means, and nothing where the bylaws never created the office.
An LLC has no default set of offices at all. The signer is a member, a manager, or the holder of a title the operating agreement invented, and whether that carries power to bind is a question of state law as much as of the agreement. California keeps the traditional rule: in a member-managed LLC every member is an agent, and in a manager-managed one only managers are. States adopting the revised uniform act went the other way — Minnesota's says flatly that a member is not an agent solely by reason of being one.
Actual authority and apparent authority are different questions
Actual authority is what the company told the signer they could do: a delegation in the bylaws, a clause in the operating agreement, a resolution. Apparent authority is what the company let the counterparty believe — a reasonable belief traceable to the company's own conduct, such as giving someone a title or letting them run the account for two years. Either binds the company. Only one is discoverable from outside.
Two facts, four outcomes
What the company actually authorised
What the other side reasonably believed
No basis to believe
Believed, from the company's conduct
No actual authority
Nobody is bound
And the signer may owe damages for warranting an authority they did not hold.
The company is bound
Apparent authority. The title and the course of dealing did the work the resolution never did.
Bylaws or a resolution
The company is bound
Actual authority needs no audience. The counterparty's ignorance of it changes nothing.
Bound, and provable
Where you want to be on anything material: the authority exists and the file shows it.
This is why internal limits are so often worthless against a counterparty who never saw them. A policy that nobody may commit more than $50,000 without the board restrains the employee, not the company's liability to a supplier with no way of knowing it existed. Limits reach outsiders only when the outsider knows of them — or, in states that allow it, when the company has filed a public statement of authority. Minnesota's lets an LLC file one granting or restricting the power to bind it, and a person giving value in reliance on the filed grant is protected.
Titles that carry weight, and titles that only look like they do
| Title | Usually reliable for | Do not rely on it for |
|---|---|---|
| President / CEO | Ordinary-course commitments — supply, services, hiring | Selling the business, issuing equity, security |
| Vice President | Whatever the bylaws or a resolution actually give them | Anything by default; the title delegates nothing |
| Secretary | Certifying who holds office and what the board resolved | Committing the company commercially |
| Treasurer / CFO | Payment and banking mechanics, in the ordinary course | Borrowing, guarantees, security over assets |
| Manager (LLC) | What the operating agreement says, in a manager-managed LLC | Anything, before reading that agreement |
| Director | In the US, a board seat — not an office, not signing power | Signing, unless a resolution names them |
The distinction running through the table is ordinary course against extraordinary. Courts infer that a president can do what presidents conventionally do; nobody infers that a president can sell the company. Some extraordinary acts are not the board's to decide alone — Delaware's § 271 requires a majority of the outstanding voting stock to approve a sale of substantially all a corporation's assets.
When a resolution is genuinely needed
Two situations, and only two. Either a statute or the company's own constitutional documents require the decision at that level, or the counterparty will not close without one. Everything else is optional paperwork with a real cost: a company that resolves on every purchase order teaches everyone that resolutions mean nothing.
- Borrowing, guaranteeing or granting security. Every lender asks; this is the commonest trigger.
- Opening or changing bank mandates, usually on the bank's own wording.
- Issuing shares, options or membership interests. The cap table is only as good as the authority behind it.
- Selling the business or substantially all its assets — often a stockholder decision, not a board one.
- Acquiring or disposing of real property, where the recording office and title insurer ask.
- Appointing or removing officers, which is what makes every later signature block true.
What a resolution must contain, how written consent replaces a meeting, and where quorum rules bite are covered in our guide to board resolutions. The point for whoever holds the pen is narrower: if the transaction is on that list, the resolution should exist before the signature, not be reconstructed after it.
Board resolution template
The standard form: the recital, the resolved clause, the named signatory, and the certification block a bank will actually accept.
Checking the other side, in order of effort
How far up to go before you sign
- Two minutes
Read the block
The entity name matches the party on page one, and the title is one that entity type can have.
- Ten minutes
Check the public register
Confirms the exact legal name and good standing, and often how an LLC is managed.
- One email
Ask for a secretary's certificate
Names the officers in post, attaches the resolution, signed by the person paid to certify it.
- Part of the closing set
Require an incumbency certificate
Offices held and specimen signatures. Routine on financings and asset sales.
Proportion the check to the exposure, not to how well you know the signer.
Asking is not an insult; a finance lawyer would be surprised by its absence. The awkwardness is a small-transaction phenomenon, worst where the counterparty is a company nobody has dealt with before.
If the person had no authority at all
The contract is not automatically void. The company can ratify — take the benefit, keep performing — and ratification binds it as fully as authority would have. Apparent authority may bind it whatever the internal position was. Failing both, the counterparty sues the individual who signed, on the footing that a person purporting to act for a principal warrants that they may.
Before you put your own name on it
- The entity line names the company as registered, and matches page one.
- Your title is one the bylaws, operating agreement or a resolution created.
- If the transaction is on the list above, the resolution is already in the file.
- Nothing names you personally as party, indemnitor or guarantor.
- The other side's block names their entity too; this cuts both ways.
- Any later variation is signed the same way, not by personal email.
Authority is cheap to prove and expensive to argue about
The asymmetry is the argument. Getting the block right costs a line of typing; a secretary's certificate costs one email. Litigating whether a sales director had apparent authority to agree three years of exclusivity costs more than the exclusivity was worth, and turns on things nobody wrote down: who was on which call, what the email footer said, whether anyone corrected the impression.
Two habits close almost all of it. Write the entity name above every signature you give, email included. Ask for the certificate whenever the number is large enough that you would mind losing it. Both happen before anything has gone wrong, which is the only point at which either is still available — as with the date beside the signature.
Sources
General information, not legal advice. This guide explains how these documents and rules generally work. Law varies by jurisdiction and changes, and none of it is applied to your circumstances here. For anything consequential, consult a licensed attorney where you are.
Frequently asked
What happens if I sign a company contract with just my name?
It depends on whether the document identifies the company as the contracting party elsewhere. If the entity is named as a party on the first page, a bare signature is usually survivable. If the entity appears nowhere, the counterparty can argue you contracted personally, and the burden of showing that both sides intended otherwise falls on you. Adding the entity line above the signature avoids the question entirely.
Do I need a board resolution to sign an ordinary contract?
Usually not. Routine commercial contracts within an officer's normal remit need no resolution, and producing one for everything devalues the ones that matter. Resolutions are for borrowing, granting security, opening bank mandates, issuing equity, real property and disposals of the business — plus anything your bylaws, operating agreement or counterparty specifically require.
What is a certificate of incumbency and when should I ask for one?
It is a document, signed by the company secretary or an equivalent officer, listing who currently holds which office and often including specimen signatures. It is standard in financings, acquisitions and property closings. Ask for one whenever the transaction is large enough that a later dispute about whether the signer held office would be worth having.
Can an employee bind the company without being an officer?
Yes. Apparent authority does not require an office. If the company gave someone a title, let them negotiate, and never corrected the impression that they could commit, a counterparty who reasonably relied on that can hold the company to the deal. Internal spending limits do not help unless the counterparty knew about them.
Who can sign for an LLC — a member or a manager?
It depends on the state and on the operating agreement. Some states keep the traditional rule that members are agents in a member-managed LLC and managers are agents in a manager-managed one. Others have removed member agency by statute entirely, leaving authority to the operating agreement. Read the agreement and check the state filing before relying on a title.