Approvals with verified signing authority

A signature binds a company only when the person signing has the power to bind it. Approval decides whether a contract should be signed. Authority decides who may sign it. They are different questions.

Most teams answer both with an email that says “ok”. That works until the amount is large, or the person who signs is not who everyone assumed.

Approval is not authority

An approver says yes to the business terms: the price, the scope, the risk. A signatory has the legal power to commit the company. One person can be one without being the other. A finance director may approve a supplier contract that only the legal representative may sign, and a legal representative may sign a contract nobody in the business has approved.

Treating the two as one question is how a contract ends up signed by the wrong person, or not signed because everyone thought somebody else had approved.

Where authority comes from

For a company in Colombia, the power to sign comes from several places, and you should look at each:

• The certificate of existence and legal representation. Issued by the chamber of commerce, it names the legal representatives and the powers they have.

• The bylaws. They often set limits, for example an amount above which another body must approve.

• Powers of attorney. A person other than the legal representative may sign if the power is granted in writing, and for the right scope.

• Board or shareholder decisions. Larger or unusual contracts may need one before anyone signs.

In each case, look for three things: who, how much, and until when. A power that has expired is no power.

Write the approval rules down

If the rules live in people’s heads, they change with the person you ask. Write them as rules, by contract type, by amount, and by whether the contract departs from your standard text. A good rule set looks like this:

• Standard NDA, unchanged: no extra approval needed.

• Standard NDA, changed by the other party: a lawyer approves.

• Any contract above an amount: the legal representative approves, then signs.

• Any contract with an unusual clause: Legal and the business owner both approve.

Each rule adds steps, in order. When the rules are written, anyone can see what a contract needs before it goes to signature.

Check the other side too

Authority is not only your problem. Before signature, find out who signs for the other party and what proves their powers: a certificate, a power of attorney, a board decision. Check that the documents are current and that the person named is the person signing.

Where a public company registry is available, consult it. Where it is not, ask for the documents and file them with the contract. In both cases, if something does not match, stop and ask a lawyer rather than assuming it will be fine.

Make the approval step real

An approval only protects you if it cannot be skipped. That means:

• the approval is a step in the process, not a courtesy email;

• only a person with enough authority can complete it;

• rejecting asks for a reason, and approving can carry a comment;

• nothing automatic can complete it on anyone’s behalf.

Keep the evidence

For each approval, keep who gave it, when, under which rule, and for which version of the document. If the contract is ever questioned, this is the first thing anyone will ask for. It is much easier to keep it as you go than to rebuild it later. We explain why in Why every step of a contract should be recorded.

How Colibit handles it

In Colibit, approvals follow rules you set: by contract type and by whether the contract departed from your standard. An approval step is one the agent cannot cross. Only a person with enough authority can complete it, and rejecting asks for a reason.

Before signature, Colibit also reviews who signs for the other party and the documents that support their powers. Anything doubtful, such as an expired power or a name that does not match, goes to a lawyer instead of passing.

This article is general information, not legal advice.