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Let’s imagine for a moment that you are a vendor, and you’ve been working to secure a big contract with a corporation, which, for this example, we’ll call BUYCOM. You’ve entertained and explained, wined and dined, led plant tours and pored over spreadsheets. BUYCOM has agreed to an incredible deal, and this is the final push, the moment when BUYCOM’s representative signs the contract. A few quick strokes of the pen, and it’s done, right? But how do you know that this rep actually has the authority to make this deal?Let’s turn the tables, then, and look at this from another point of view.
Generally, any contract entered into by a LLC will need the consent or agreement of ALL members, evidenced either by their signatures on the contract or by giving authority to a manager or group of memebers to sign the contract. Who can sign it? A: As described in other FAQs, purchases of goods or services or for real estate transactions are through the authority of the EVPCFO. The process to enter into agreements of these types is described earlier. See FAQs, above, on signing and processing business contracts.
Imagine, this time, that you are the corporate secretary at BUYCOM and you receive notice that your corporation has just entered into a contract with a vendor. The terms of the contract are ridiculous, one that the board would never agree to under normal circumstances. As you review the document, you check the name at the bottom. It belongs to an employee, but not one with signing authority. So, the question remains: Will BUYCOM have to honor this agreement?At the crux of this question lies the idea of signing authority.
![Contracts Contracts](http://weagree.com/wp-content/uploads/2017/02/US_style_final_page_15-05-2011.png)
Who has the power to enter a corporation into a legally binding agreement? How does a corporation empower such a person to do so? And what legal steps must be taken for such authorization to be recognized? It turns out that all of this must be settled through a corporate resolution for signing authority.
Below, we’ll review the details of corporate resolutions, including what they are, why your corporation may need to use them, and how to ensure that your corporate resolution meets all the standard requirements to be legally binding. What Is a Corporate Resolution for Signing Authority?Corporate resolutions are formal declarations of particularly consequential decisions made by a corporate entity. These resolutions formally record any major corporate decision so that they can then be filed with the company’s official records. Corporate resolutions for signing are particular resolutions that clarify and define which corporate officers have the legal standing to sign contracts on behalf of the corporation.
Such resolutions also grant individuals the power to make transfers or assignments, sell or lease real estate, and make other important decisions that may affect the corporation.Typically, the authority to enter the corporation into a contract or other legal agreement is limited to a select few of the corporate officers. The details of this arrangement are defined by the corporation’s by-laws. On occasion, however, a corporation may want to grant limited aligning authority to someone not originally listed in the corporation’s by-laws. In such instances, the corporation must complete a corporate resolution. Price is the Content Marketing Manager at Diligent Corporation. With a career that has focused on digital marketing, Nick’s specialization is in content marketing and content creation.
With experience running several content departments to create and write content for Fortune 500 companies, Nick’s dedication lies in growing business through actionable and insightful content to ensure value to both prospects and customers. Nick has worked in the board portal space for two years, which has enabled him to gain a better understanding of the needs of boardrooms and the type of content that resonates with board directors, general counsels and corporate secretaries.Nicholas is an experienced Content Marketing Manager with a demonstrated history of working in the computer software industry. Skilled in Digital Strategy, Marketing Strategy, Demand Generation, Lead Generation, Sales, Market Research, and Content Development.
With a strong media and communication background, Nick graduated Trinity College (Hartford, CT) with a Bachelor of Arts (B.A.) in English (Creative Writing focus) and he has Minors in Religion & Asian Studies.