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Not everyone is authorized to sign an agreement on behalf of a company. In the case of a sole proprietorship, this is the owner; in the case of a legal entity such as a BV, it is the authorized board of directors or someone with a power of attorney. Check the signing authority in the Trade Register before doing business.
Sole proprietorship: the owner signs
In the case of a sole proprietorship, there are few issues: the owner is the business and signs personally. He is personally bound by the agreements. However, he can authorize someone else to sign on his behalf via a power of attorney.
Legal entity: the board is authorized
In the case of a private limited company (BV) or public limited company (NV), the board of directors generally represents the company. The articles of association may stipulate that directors are authorized only jointly (joint representation) or, conversely, each independently. Exactly who has signing authority and up to what amount is evident from the articles of association and the Commercial Register.
Power of attorney and proxy
A board can delegate authority via a power of attorney or proxy, for example to a manager or purchasing agent, often up to a specific amount. An authorized representative may then sign within the limits of their power of attorney. Beyond those limits, they do not, in principle, bind the company.
Check the authorization in advance
If someone signs without the proper authority, the agreement may under certain circumstances not be binding. Therefore, check the extract from the Chamber of Commerce Trade Register: it states who is authorized and with what limitations. If in doubt, request a power of attorney or have an authorized director co-sign.
Frequently Asked Questions
Who is authorized to sign on behalf of a private limited company?
In principle, the competent board, sometimes only jointly, and persons with a power of attorney or proxy. The Commercial Register demonstrates the authority.
How do I check if someone is authorized to sign?
By means of an extract from the Trade Register of the Chamber of Commerce, which lists the authorized persons and any restrictions.
What if someone signs without authorization?
In that case, the agreement may not bind the company under certain circumstances. If in doubt, request a power of attorney or co-signature by an authorized director.
Want to be sure your contract is binding?
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