Deals collapse for a lot of reasons — price disputes, due diligence surprises, financing gaps. But one of the quietest deal-killers is also one of the most preventable: the person who signed the contract didn’t have the legal authority to bind the company. You find out weeks later, sometimes after you’ve already performed. At that point, you’re not negotiating a contract; you’re negotiating a way out of a mess.

Confirming signing authority before you close is a straightforward process once you know what to look for. This guide walks you through exactly how to do it, from the first term sheet to the moment ink dries.

Understand What Signing Authority Actually Means

Signing authority — sometimes called authorized signatory status — is the legal power to enter into binding commitments on behalf of an organization. It’s not the same as seniority, title, or even day-to-day operational control. A VP of Sales who runs every client relationship may have zero authority to sign a multi-year service agreement. A bookkeeper might be an authorized signatory for payables under a certain threshold. The two things are separate.

Authority flows from a few sources. For corporations, it typically comes from the board of directors, either through a formal resolution or through the corporate bylaws. For LLCs, it comes from the operating agreement. For partnerships, the partnership agreement governs. In the absence of a specific grant, courts sometimes apply the doctrine of apparent authority — meaning a company can be bound by someone who reasonably appeared to have authority, even if they didn’t technically have it. That’s cold comfort when you’re the one trying to enforce the deal.

Understanding this distinction matters because it tells you exactly where to look when you verify. You’re not asking “does this person seem important enough?” You’re asking “does a governing document or board resolution say this person can sign this type of agreement?”

Step 1: Ask for the Governing Document Up Front

The cleanest way to confirm contract validity from the start is to request the relevant governing document before negotiations get serious. For a corporation, that means the bylaws and any relevant board resolutions. For an LLC, ask for the operating agreement. This is a normal, professional request — any counterparty who reacts with suspicion or resistance should itself be a flag.

What to look for in the document

Once you have the document, scan for these specifics:

• Who can bind the company contractually. Many bylaws specify that the CEO, President, or a combination of officers can sign contracts. Some require dual signatures above a dollar threshold — for example, anything over $500,000 requires both the CEO and CFO.
• Dollar or category limits. Authority is frequently tiered. An Operations Director might be authorized to sign vendor agreements up to $50,000 but not above it.
• Whether a board resolution is required for the specific transaction type. Real estate purchases, acquisitions, and long-term service agreements often require separate board approval even if the CEO has general signing authority.

If the document is ambiguous or out of date, ask directly: “Has the board passed any resolution that modifies or supplements what’s in the bylaws?” Get that resolution in writing.

Step 2: Request a Corporate Authorization Certificate or Resolution

For significant deals — anything material in size or duration — don’t rely solely on the governing document. Ask for a corporate authorization certificate or a board resolution specifically authorizing the transaction and naming the authorized signatory. This is standard practice in M&A, commercial real estate, and large vendor agreements.

A proper authorization certificate will typically include:

• The full legal name of the entity
• The date the resolution was passed
• A description of the transaction being authorized
• The name and title of the person authorized to sign
• The signature of the corporate secretary or another officer certifying the resolution’s accuracy

This document does two things. First, it confirms authority exists. Second, it creates a paper trail that protects you if someone later claims the signatory was acting outside their scope. Courts have consistently given weight to certified resolutions as evidence of actual authority.

Step 3: Cross-Check Public Records

Governing documents and certificates tell you what the company says internally. Public records tell you what the company has officially declared to the state. For US entities, the Secretary of State filing in the state of incorporation or formation is your starting point.

Most Secretary of State databases are searchable online and free to use. Search for the company’s registration, and look at who is listed as an officer or registered agent. This won’t tell you everything about internal authority, but it will confirm the entity exists, is in good standing, and identify who holds named officer roles.

For corporations with publicly available SEC filings, the SEC’s EDGAR database is invaluable. Annual reports (10-Ks) and proxy statements name officers and directors and often describe their specific responsibilities. If the person you’re dealing with isn’t listed anywhere in official filings, that warrants a direct conversation.

Step 4: Verify the Signatory’s Identity

This step gets skipped constantly, especially in deals that move quickly or are conducted remotely. You’ve confirmed that a “Jane Doe, CFO” has signing authority. But have you confirmed that the person presenting themselves as Jane Doe is actually Jane Doe?

In person, this is usually straightforward. Remotely, it requires more deliberate effort:

• Use a video call — not just email — before finalizing. Confirm the person’s name, title, and role verbally.
• Verify their company email domain matches the entity you’re contracting with. A Gmail address for a corporate counterparty should raise an eyebrow.
• For high-value transactions, require notarized signatures or use a reputable e-signature platform with identity verification built in. Platforms like DocuSign offer ID verification add-ons that create an audit trail tied to a government-issued ID.

This is not paranoia. Business identity fraud is a real and growing problem. The FTC’s business fraud guidance specifically notes that fraudulent actors sometimes impersonate legitimate business representatives to enter into contracts and then extract payment or services before disappearing.

Step 5: Build the Confirmation Into the Contract Itself

Your contract should include a representation and warranty clause in which the signing party affirmatively confirms their authority. A standard version reads something like this: “The individual executing this Agreement on behalf of [Entity Name] represents and warrants that they are duly authorized to do so, and that no further approval, consent, or authorization is required.”

This clause doesn’t replace your due diligence — it supplements it. If the representation turns out to be false, you have a contractual claim in addition to any other remedies. More practically, it signals to the counterparty that you take these things seriously, which tends to surface problems before they become yours to deal with.

Step 6: Confirm Authority Again at Closing

Deals sometimes take months. Corporate structures change. Officers resign. Board compositions shift. An authorization that was valid when you started negotiating may no longer be valid by the time you’re ready to sign. This happens more often than people expect, particularly in companies going through leadership transitions or restructuring.

At closing, reconfirm two things: that the authorized signatory is still in their role, and that no corporate event (merger, acquisition, officer removal) has altered the authorization since it was originally provided. A brief certificate from the corporate secretary dated within five business days of closing is the cleanest way to do this. Some transactions require “bring-down certificates” for exactly this reason.

Common Mistakes to Avoid

The most common mistake is assuming that a senior-sounding title equals signing authority — it doesn’t. The second is treating authority verification as a one-time checkbox rather than something to confirm at both the start and close of a transaction. A close third is skipping the verification entirely on smaller deals, which is precisely where enforcement issues tend to surface because the parties are less sophisticated. Don’t rely on apparent authority as a safety net; it’s a doctrine courts apply inconsistently, and litigating it is expensive. Finally, don’t accept verbal assurances. If someone tells you they have authority to sign, ask them to put that in writing — if they genuinely have the authority, it takes five minutes and costs nothing.