Is my business partner authorized to sign the agreement?

Before signing an agreement, verify whether the other party is authorized to sign: is he authorized to sign on behalf of his company, and without restrictions? This is usually evident from the extract in the Chamber of Commerce Trade Register. If someone signs who is not (sufficiently) authorized, the agreement may be invalid. Additional verification is required in the case of a power of attorney or a minor entrepreneur.

As an entrepreneur, you must be able to trust your business partners to some extent. A written agreement helps, but you must be able to trust that the other party has the authority to sign—otherwise problems may arise and the agreement may even be invalid.

What is signing authority?

Signing authority means that someone is allowed to sign an agreement on behalf of a company. This can be full (without restrictions) or limited. Often, someone has limited authority, for example, for a specific type of agreement or up to a certain value.

The Chamber of Commerce Trade Register provides clarity

Whether someone is authorized to sign is often evident from the Chamber of Commerce Trade Register, which contains information about the company and the authorized persons. In practice, the extract is particularly important for determining who is authorized to sign and whether any restrictions apply; other countries also maintain such registers.

The standard authority varies by legal form. In a sole proprietorship, only the owner signs; in a limited partnership, only the managing partner. For other forms, it is more complex: in a general partnership, partners may have limited, unlimited, or no authority. An advantage: in principle, you may rely on the information in the Trade Register. If a company fails to keep its registration up to date after a change, it bears the consequences itself.

Powers of attorney and minor entrepreneurs

In addition to the authority established in the register, directors can authorize others to sign via a power of attorney . In a general partnership, the partners are even authorized solely by virtue of a power of attorney from the other partners. Such a power of attorney—certainly for a single agreement—is not always listed in the Commercial Register. In that case, verify its validity and attach a copy to the agreement to prevent future disputes.

Also pay attention to the minor entrepreneur: they are not always allowed to sign themselves. Often, the parent's signature is required, unless the subdistrict court has granted emancipation or the parents agree in advance. Sometimes an adult authorized representative is listed in the Commercial Register, who then signs. Therefore, it is especially important to carefully determine who is authorized to sign when dealing with minor entrepreneurs.

Frequently Asked Questions

How do I check if someone is authorized to sign?

Consult the extract from the Chamber of Commerce Trade Register: it states who is authorized to sign on behalf of the company and whether any restrictions apply. In the case of a power of attorney, verify its validity.

What if an unauthorized person signs?

In that case, the agreement may be invalid or fail to bind the company, with all the associated problems. Therefore, verify the authority before signing.

Is a minor entrepreneur allowed to sign personally?

Not always. Often, parental consent or emancipation by the subdistrict court judge is required, or an adult authorized representative signs. Check this thoroughly beforehand.

Certainty when signing contracts

The legal experts at MKB Juristen help you verify authority and make your agreements watertight. View our expertise in corporate law or schedule an intake meeting .