# Authorised signatory

Source: https://contracko.com/glossary/authorised-signatory

# Authorised signatory

A person with legal authority to bind an organisation by signing a contract on its behalf.

## Definition

An authorised signatory is someone whose signature legally binds the entity, deriving from statutory power, the trade-register registration, or a power of attorney (volmacht). Signing without proper authority can leave the contract unenforceable against the entity unless it is later ratified. Counterparties commonly verify authority via the Chamber of Commerce extract before signing.

## Example

> A junior manager signs a supply contract, but as only the board director holds signing authority above €50,000, the supplier confirms authority before delivery.

## Why this is a business risk

A contract signed by someone without proper authority may be unenforceable against the organisation, leaving both parties exposed. If the unauthorised signature is only discovered in a dispute, the cost of challenging enforceability often exceeds the value of the contract itself. Counterparties that skip authority checks open themselves to the risk that the entity later denies being bound.

## How to manage it

- Before signing, request and check the counterparty's Chamber of Commerce extract to confirm who holds signing authority and any limits that apply.
- If the signer acts under a power of attorney, obtain a copy of the volmacht and verify its scope and validity.
- For high-value contracts, include a representation by each party that the signing individual is duly authorised.
- Keep the signing details and any authority evidence in the same file as the signed contract so it is available if enforceability is ever questioned.

### How Contracko helps

Contracko's AI extraction captures the signing parties and their roles as structured metadata on every contract, making it easy to filter the repository by signatory name or entity. When a contract needs to be located quickly to confirm who signed and in what capacity, the searchable repository replaces the hunt through inboxes and shared drives.

## Legal references

- [BW 3:60 Dutch Civil Code: power of attorney (volmacht) Dutch law](https://wetten.overheid.nl/BWBR0005291)

Unless marked otherwise, references are to Dutch law (Burgerlijk Wetboek, the Dutch Civil Code); EU instruments such as the GDPR apply across the EU. This is general information, not legal advice. Other jurisdictions treat these concepts differently. Verify the current text and your situation with a qualified lawyer.

## Relevant for

[Legal Services](https://contracko.com/industries/legal-services)[Financial Services](https://contracko.com/industries/financial-services)[Government & Public Sector](https://contracko.com/industries/government)

## Related clauses

- [Entire Agreement Clause](https://contracko.com/clause-library/entire-agreement)
- [Notices Clause](https://contracko.com/clause-library/notices)

## Related terms

- [Effective date](https://contracko.com/glossary/effective-date)
- [Digital signature](https://contracko.com/glossary/digital-signature)
- [Counterparty](https://contracko.com/glossary/counterparty)
- [Order of precedence](https://contracko.com/glossary/order-of-precedence)

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## Frequently asked questions

Common questions about this term.

- **Q:** What happens if a contract is signed by someone without authority?
  **A:** The contract may be unenforceable against the entity. The entity can choose to ratify it, in which case it becomes binding from the original signing date, or it can refuse, leaving the unauthorised signer personally liable for resulting loss.

- **Q:** Is a KvK extract the only way to verify signing authority in the Netherlands?
  **A:** It is the primary and most reliable method. A power of attorney (volmacht) can also extend authority to someone not listed in the trade register, but the volmacht itself should be checked for scope and any internal approval requirements.

- **Q:** Can a company later ratify a contract signed without authority?
  **A:** Yes. Ratification under Dutch law (bekrachtiging) makes the contract binding as if it had been properly authorised from the start. It should be done explicitly and in writing to avoid doubt.

- **Q:** Do two directors always need to sign jointly?
  **A:** Only if the articles of association or the trade-register entry require joint signing. Many entities grant sole signing authority to one or more directors, or impose a threshold above which joint signing is required.

- **Q:** Does a digital signature guarantee the signer was authorised?
  **A:** No. A digital signature confirms identity and integrity of the document but says nothing about whether the signer had corporate authority to bind the entity. Authority verification remains a separate step.

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