Proof of authority documents are the paperwork that shows a signer actually has permission to bind the company or person they claim to represent. The core set is short: a corporate resolution or written consent of the board, a certificate of incumbency, the LLC operating agreement or partnership agreement, and, for individuals, a power of attorney. Each one identifies the entity, names the authorized signer, defines exactly what that person can do, and carries current dates and signatures. Banks, title companies, and sophisticated contract counterparties will not close without them.
When These Documents Get Requested
Banks are the most frequent gatekeepers. Before opening a business account or extending commercial credit, a bank asks for formation records, ownership documents, and identification of everyone authorized to transact.1U.S. Small Business Administration. Open a Business Bank Account Federal anti-money-laundering rules push them further. Under the Customer Due Diligence rule, every covered financial institution must identify and verify each beneficial owner holding 25 percent or more of a legal entity’s equity, plus at least one individual with significant control, such as a CEO or managing member.2eCFR. 31 CFR 1010.230 – Beneficial Ownership Requirements for Legal Entity Customers
Real estate closings are the second place these documents come up. When an LLC or corporation sells or mortgages property, the title company needs proof that the person signing the deed holds specific power to transfer ownership. Without that proof, a disgruntled partner or shareholder can later attack the sale as unauthorized and threaten the deed itself.
Large commercial contracts round out the list. Counsel on the other side will ask for authority documentation before signing, because a company that later claims its representative lacked permission can try to void the deal outright.
The Core Documents
Corporate Resolutions
A corporate resolution is the board’s formal record authorizing a specific person to take a specific action. It is the workhorse of corporate authority. The Model Business Corporation Act, adopted in some form by most states, gives boards broad power to appoint officers, define their duties, and authorize them to execute business. Boards can act by written consent instead of holding a meeting, as long as every director signs. In practice, a resolution might authorize the CFO to sign loan documents up to a set dollar amount, or allow the president to execute a particular lease.
Certificates of Incumbency
An incumbency certificate confirms that the person signing actually holds the title they claim. Signed by the corporate secretary, it lists names, titles, and often specimen signatures of the company’s current officers. If the secretary’s own incumbency needs verification, another officer countersigns. Incumbency certificates are usually delivered at closing alongside the resolution, so the recipient can see both that the authority was granted and that the right person is exercising it.
Operating Agreements and Partnership Agreements
For an LLC, the operating agreement is the foundational authority document. It states whether the LLC is member-managed or manager-managed and spells out who can sign contracts, take on debt, or convey property. Third parties often ask for the relevant sections, or for a manager’s certificate confirming the signer’s authority under the agreement.
Partnerships work on the same logic. Under the Uniform Partnership Act, adopted in some form in nearly every state, each general partner is automatically an agent of the partnership for ordinary business. The partnership agreement can restrict that default authority, and those restrictions bind anyone who knows about them. A counterparty dealing with a partnership should read the agreement to confirm the signing partner has not been stripped of the specific power at issue.
Powers of Attorney
A power of attorney is the main proof-of-authority document when one individual acts for another, though businesses use them as well. A general power of attorney grants broad authority across many types of transactions. A special or limited power of attorney covers only a defined action, such as closing a particular real estate sale or managing a specific bank account. The agent typically must present the original document to the institution before the authority is honored. This comes up often in real estate when a seller cannot attend closing in person.
What Every Authority Document Must Contain
A document with gaps becomes a liability instead of a shield. Compliance officers and title agents will bounce paperwork that misses any of the elements below.
- Full legal entity name as it appears on Secretary of State formation records. Trade names and informal abbreviations create ambiguity about which entity is granting the authority.
- Full legal name and exact title of the authorized individual. “John Smith, VP” is not enough when a company has six vice presidents; “John A. Smith, Vice President of Operations” ties the authority to one person in one role.
- Scope of authority. This is the element most often botched. A well-drafted resolution limits the grant to a defined action: borrowing up to a stated dollar amount, executing a named contract, or conveying a particular property. Open-ended language invites later arguments about whether the signer exceeded their mandate.
- Dates. Both the date the board or members voted to grant the authority and the date the document was executed. Outdated authorizations are a common reason paperwork gets rejected.
- Signatures of the granting body (directors, members, or the principal) and, for certificates, the corporate secretary or equivalent officer who certifies the document.
A certificate of good standing from the Secretary of State often rides along with these documents, especially for banking, government contracts, and interstate deals. It confirms the entity exists, was properly formed, and has not been dissolved or suspended. Most states charge between $10 and $50, though fees range from nothing to around $90 depending on the state and whether you want expedited processing.
Notarization, Corporate Seals, and Electronic Signatures
Most receiving institutions require authority documents to be notarized. A notary public witnesses the signing, verifies the signer’s identity, and applies a seal or stamp. Notary fees for a standard acknowledgment vary by state, with most falling between $5 and $10, though some states allow fees up to $25 or $30 per signature. Remote online notarization tends to cost more because of platform surcharges.
Corporate seals still appear on many authority documents, though their legal necessity has faded in most states. As a practical matter, institutions like Freddie Mac still require the corporate secretary to execute certificates with the corporate seal attached, and many title companies expect to see one.3Freddie Mac. Form 989M – Certificate of Corporate Secretary When in doubt, apply the seal. Nothing gets rejected for having one.
Electronic signatures are legally valid for most authority documents. Federal law provides that a signature or contract cannot be denied legal effect solely because it is in electronic form, and that notarization requirements can be satisfied electronically as long as the notary’s electronic signature and all required information are attached to the record.4Office of the Law Revision Counsel. 15 USC 7001 – General Rule of Validity Institutions set their own acceptance policies on top of that. Banks increasingly accept digitally signed documents through secure portals, while some title companies still insist on original wet-signature documents delivered by courier or certified mail. Confirm the receiving party’s requirements before finalizing.
Documents Headed Overseas: Apostilles
Authority documents used in a foreign country usually need an added layer of authentication. For countries in the 1961 Hague Convention, that layer is an apostille certificate confirming the notary’s or official’s signature is genuine. Documents signed by a federal official, U.S. consular officer, or military notary are apostilled by the U.S. Department of State at $8 per document, using Form DS-4194 submitted with the originals and the fee.5Hague Conference on Private International Law. United States of America – Competent Authority6U.S. Department of State. Preparing a Document for an Apostille Certificate
State-issued documents follow a different path. If a state-commissioned notary did the notarization, the apostille comes from that state’s Secretary of State office rather than the federal government. Fees and processing times vary by state. For countries that are not party to the Hague Convention, documents require a full authentication certificate instead of an apostille, which runs through both state and federal channels.6U.S. Department of State. Preparing a Document for an Apostille Certificate
One trap to avoid: do not notarize the original of a government-issued document that you plan to apostille. Notarizing it can disqualify it from apostille. If the destination country wants a translation, have a professional translator prepare it and notarize the translation separately.
What Happens If the Authority Isn’t Real
Signing a contract for someone else without actual authority carries real exposure. The principle is simple: anyone who claims to represent a principal implicitly warrants that the authority exists. If it does not, the unauthorized signer is personally liable to the third party who relied on that representation. The principal is generally not bound unless apparent authority or ratification applies.
Apparent authority is the harder of those two. It arises when a company’s own conduct leads outsiders to reasonably believe someone has authority, even if the company never formally granted it. If a company lets a vice president negotiate deals for years without objection, a third party relying on that pattern can hold the company to a contract the VP signs, even if internal rules prohibited it. That is exactly why formal documentation exists: it replaces assumptions with written proof.
Personal liability on an unauthorized signing is strict. It applies even when the signer genuinely believed permission existed. Damages aim to put the third party in the position they would have been in had the authority actually existed, which can include lost profits, transaction costs, and expenses spent in reliance on the deal. A principal who learns of the deal can ratify it, which treats the signing as authorized from the start and releases the signer from liability, but ratification requires that the principal have capacity, know the material facts, and act before the third party withdraws or circumstances change.
Revoking Authority You Already Granted
Ending actual authority is straightforward: the board passes a new resolution, the operating agreement is amended, or the principal signs a written revocation. Cutting off apparent authority is harder. Even after actual authority ends, apparent authority lingers as long as a third party can still reasonably believe the former agent is authorized. If a company revokes a manager’s signing power but never tells the bank, the supplier, or the landlord, those parties can still hold the company to contracts the former manager signs.
Whenever you revoke someone’s authority, send written notice to every institution and counterparty that previously dealt with that person. Update signature cards at the bank, notify key vendors, and retrieve any outstanding powers of attorney. On paper the revocation is instant; in the real world it only matters once the people relying on the old authority find out.