Actual authority is the real power an agent has to act for a principal because the principal has agreed to it. In practice, it arises by express agreement (for example, a board resolution, power of attorney or mandate) or is implied from conduct, the agent’s position, customary practice, or a consistent course of dealing.It is a case law concept across England & Wales, Scotland, Northern Ireland and Ireland, and is broadly consistent in all four jurisdictions. Actual authority is distinct from apparent/ostensible authority. If an agent acts within their actual authority, the principal is bound to the transaction and the agent is entitled to an indemnity; if the agent exceeds it, the principal is not bound unless there is ratification or apparent authority applies.In company law, actual authority commonly derives from the articles, board delegations and internal authorisations. Companies Act 2006, s.40 protects third parties dealing in good faith with UK companies, but does not itself confer or define actual authority; it addresses external validity, while actual authority governs internal capacity and the agent’s duties. Similar principles apply in partnerships and LLPs. Actual authority can be limited or revoked and may terminate on events such as insolvency or loss of capacity.