E-signatures · Glossary
What is a signatory?
A signatory is a person who signs a document and, by signing, agrees to be bound by it or binds the person or organisation they sign for. An authorised signatory is someone a company, partnership or other entity has given authority to sign on its behalf, so their signature commits the entity rather than themselves.
Every contract names its parties, but it is the signatories who make it binding. Knowing who can sign, and in what capacity, is what stops a signed agreement being challenged later.
Nuwan Madhusanka · Co-founder
4 min read · Published
| Role | What they do | Bound by the document? |
|---|---|---|
| Party | Is named in the agreement and takes on its obligations | Yes, through a signatory |
| Signatory | Signs the document | Yes, personally or for the party they represent |
| Authorised signatory | Signs for a company, firm or body with authority to do so | The organisation is bound, not usually the signer |
| Witness | Watches the signatory sign and attests to it | No |
| Recipient who only receives a copy | Gets the signed document for information | No |
What a signatory is
A signatory is the human being whose signature appears on the document. Where the signatory is also the party, such as a sole trader signing a lease, the two are the same person and they are bound personally. Where the party is an organisation, the signatory acts for it: a director signing a company contract, a partner signing for a firm, an officer signing for an association. The word is also used for countries that sign a treaty, but in business it almost always means the person who put their name to the document.
Authorised signatories
An organisation cannot hold a pen, so it signs through people it has authorised. For an Australian company, section 127 of the Corporations Act 2001 lets a company execute a document by the signature of two directors, a director and a company secretary, or the sole director of a proprietary company who is also its sole secretary. A person dealing with the company can generally rely on a document signed that way. Other people, such as a sales manager or a finance officer, can sign as authorised signatories under a delegation or as the company's agent, and the other side is entitled to ask what that authority is before relying on it. Banks use the same phrase for the people allowed to operate an account.
Why capacity matters
A signature block that shows the signatory's name, title and the organisation makes it clear the person signed for someone else. Without it, a person who meant to sign for their company can find themselves arguing that they were not personally liable. The other risk runs the other way: a contract signed by someone with no authority may not bind the organisation at all. Asking for the signatory's title, checking it against the company register or a board resolution for larger deals, and recording it in the block, deals with both.
Common mistakes
Letting one director sign alone for a company that has more than one director, without a separate authority. Leaving the title line blank, so nobody can tell whether the signer acted for themselves or the business. Accepting a signature from an assistant on behalf of a manager without written authority. And confusing the recipients of a signed copy with signatories: receiving the finished document does not bind anyone, signing it does.
Signatories in the product
In the e-sign module, each signer is a recipient with a name, an email and a signing order position, and an envelope can hold up to 25 recipients. A signature block field prints up to four lines, Name, Title, Company and Date, so the capacity a signatory signed in is on the page; the Date line is stamped from the moment of signing rather than typed. When a document from the document builder is sent for signing, each signature block party becomes one signer.
Questions people ask
Can a signatory sign for more than one party?
Sometimes, for example a director who also signs personally as guarantor, but the document should then have a separate signature block for each capacity. One signature that is meant to do two jobs is a common source of disputes, because it is unclear whether the person signed personally, for the company, or both.
Does an authorised signatory need written authority?
The law does not always require it, but the other party is entitled to ask and it is sensible to have it. A board resolution, a delegation policy or a power of attorney sets out who may sign what and up to what value. Without one, the organisation may later say the signatory had no authority to bind it.
Is a witness a signatory?
No. A witness signs to confirm they saw the signatory sign, not to agree to the document, and takes on none of its obligations. Many business contracts need no witness at all. Deeds, wills, statutory declarations and some land documents do, and the rules on who may act as a witness differ by document and by state.
Is the person who sends a document for signing a signatory?
Only if they also sign it. Sending a document through an e-signature service makes someone the sender, not a party. If the sender's business is a party to the agreement, the sender or another authorised person signs as one of the signatories, usually last as the countersigning party.
What happens if a signatory signs without authority?
The organisation may not be bound, and the person who signed can be personally liable to the other side for representing that they had authority. Australian company law protects outsiders who rely on documents signed under section 127, which is one reason two officer signatures are preferred for significant contracts.
Make one with e-signatures
The button opens the generator with this use case already described. Change the wording to match your own.
Send a document for signingRelated questions
- Signer vs recipient: what a recipient signature meansA recipient signature is the mark of a person a document was sent to. Every signer is a recipient, but not every recipient signs. The roles, and who signs what.
- What is an execution block in a contract?An execution block is the signing section at the end of a contract or deed: wording that shows who signs and on what authority. Company and deed forms compared.
- What does countersign mean?To countersign is to sign after another party has signed, completing the document. How it differs from signing and initialling, and who should go last.
- What does pp mean in a signature?What does pp mean in a signature: per procurationem, signing a letter on behalf of someone else, where the pp goes, and when a document needs more than a pp.
Step by step in the builder: Add several signers to one document.
Written and checked by the OneCraft team. Last checked .