Legal Definitions - signatory authority

Signatory Authority refers to the legal power or right granted to an individual to sign documents or approve actions on behalf of another person or an organization. When an individual possesses signatory authority, their signature or approval legally binds the person or entity they represent to the terms of the document or the consequences of the action.

• Corporate Financial Transactions: The Chief Financial Officer (CFO) of a large corporation is typically granted signatory authority to approve and sign off on significant financial commitments, such as multi-million dollar loan agreements with banks or large capital expenditure requests. When the CFO signs these documents, their signature legally binds the corporation to the terms of the agreement, as they have been formally empowered by the company's board of directors to act in this capacity.

• Personal Legal Representation: An individual might execute a Power of Attorney document, designating their spouse as their agent with signatory authority to manage their financial affairs. If the individual becomes incapacitated, the spouse can then legally sign checks, authorize investment trades, or even sell property on their behalf, because the Power of Attorney grants them the legal right to act and sign for the principal.

• Government Contract Approval: A department head within a municipal government agency may have signatory authority to approve and sign contracts for services or supplies up to a certain monetary threshold, for example, $50,000. This means that their signature on a contract for, say, office supplies costing $45,000 legally commits the city agency to that purchase without requiring further approval from a higher-ranking official.