Authorized signatory
The person within an organization legally authorized to sign contracts on behalf of the legal entity. Signature by an unauthorized person generally renders the contract non-binding.
Who is an authorized signatory?
Signing authority is set by an organization's articles of association and the trade register (in NL: Kamer van Koophandel). Directors are typically authorized alone or jointly; proxies have limited authority (e.g., up to an amount or contract type).
Example
- BV director, authorized up to €500,000 per articles → signs €30,000 SaaS contract → valid.
- Sales manager signs €800,000 contract → likely non-binding unless ratified by an authorized director.
When it matters
- Every contract above a material threshold.
- International contracts (different regimes: NL, DE, US — all with different rules).
- M&A due diligence: every contract is checked for valid execution.
Common pitfalls
- Signed by the wrong person — the most common cause of non-binding contracts.
- No counterparty verification — you trust what's printed under the signature.
- Digital signature without identity verification — sometimes legally insufficient.
- Authority changed post-signing — valid at signing but problematic at renewal.
How GuardPilot flags this
GuardPilot links every contract to a registry verification of the signatory and flags:
- signing by an unauthorized person
- missing counter-signature
- changed signing authority since execution (relevant at renewal)
See Contract Review.
Related terms: Contract management · Side-letter · Master service agreement