Q&As

Can a manager who is not a director sign a simple contract on behalf of a company? If so, what is required to show authority to sign?

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Published on LexisPSL on 18/03/2019

The following Commercial Q&A provides comprehensive and up to date legal information covering:

  • Can a manager who is not a director sign a simple contract on behalf of a company? If so, what is required to show authority to sign?

Can a manager who is not a director sign a simple contract on behalf of a company? If so, what is required to show authority to sign?

As noted in Practice Note: Forming enforceable contracts—authority, section 43 of the Companies Act 2006 (CA 2006) provides that the following have authority to make a contract for the company:

  1. the company itself by writing under its common seal, and

  2. a person acting under the company's authority, express or implied

A person might therefore have:

  1. express actual authority (ie they have been specifically authorised by a formal delegation of the board’s powers)

  2. implied actual authority (ie they have implied authority arising out of his position), or

  3. apparent (or ostensible) authority (ie it appears to a third party that the person has authority)

See Practice Note: Execution formalities—companies for further information.

The articles of association of a company will generally provide that the board of directors is responsible for the management of the company giving the directors express authority. The articles may also authorise the board to

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