Change in Authorised Signatories

In the corporate world, the term authorised signatory refers to an individual who has the legal authority to bind a company to contracts, financial commitments, and other official documents. Changes to this list of signatories are routine but must be handled with care to avoid compliance problems, transaction delays, or legal disputes.

Why Updating Authorised Signatories Matters

• Regulatory compliance: Many jurisdictions require banks, government agencies, and thirdparty vendors to maintain an uptodate register of who may sign on behalf of the company.
• Risk management: Limiting signing authority to the right people reduces fraud risk and protects the companys assets.
• Operational continuity: When an employee leaves, retires, or is promoted, failing to update the signatory list can halt payments, loan processing, or procurement.
• Corporate governance: Boards and shareholders often view an accurate signatory register as a key indicator of effective internal controls.

Common Triggers for a Signatory Change

Below are the most frequent situations that prompt a revision of authorised signatories:

Trigger	Typical Action
Resignation or termination of an employee	Remove the departing person and add a replacement, if required.
Promotion or change of role	Adjust the level of authority (e.g., from sign for invoices up to $10,000 to sign for all contracts).
Company restructuring or merger	Consolidate signatory lists, align with new organisational chart.
Regulatory or banking requirement update	Submit revised KYC documents, board resolutions, and updated signatory forms.
Legal name change or incorporation amendment	Issue new corporate seal and update statutory registers.

StepbyStep Process for Changing an Authorised Signatory

1. Identify the Need

Document the reason for the change. Whether it is a departure, promotion, or a correction, a clear trigger helps the audit trail.

2. Obtain Board Approval

Most companies require a board resolution or a resolution of the shareholders meeting. The resolution should:

• State the name(s) of the outgoing and incoming signatories.
• Specify the scope of authority for each signatory (e.g., financial limits, types of contracts).
• Be signed by the chairman or a duly authorised director.

3. Update Internal Registers

Enter the new information into your companys internal register, which may be kept in a corporate secretariat system, an ERP module, or a secure spreadsheet. Ensure the following fields are captured:

• Full legal name
• Position / title
• Identification number (passport, national ID, or employee number)
• Signing limits
• Date of appointment and, if applicable, date of removal

4. Notify External Parties

Inform banks, insurers, government bodies, and any other third parties that maintain a record of your signatories. Typical documents required include:

• Certified copy of the board resolution
• Updated specimen signatures
• Valid identification documents for the new signatory
• Completed changeofsignatory forms supplied by the external party

5. Secure Appropriate Signatures

For the first transaction after a change, many institutions request a dualsignature one from the outgoing signatory (to confirm the handover) and one from the incoming signatory.

6. Archive the Change

Keep a complete audit trail in a secure location. Archive the old resolution, the new resolution, and all correspondence for at least the statutory retention period (often five to seven years).

Best Practices & Tips

• Maintain a master signatory register. A single source of truth reduces duplication and confusion.
• Set clear limits. Define monetary caps and transaction types for each signatory this simplifies compliance checks.
• Use electronic signatures where permitted. Modern banking platforms accept digital signatures, shortening turnaround time.
• Conduct periodic reviews. At least annually, verify that the register matches the current organisational chart.
• Educate staff. Ensure that anyone who handles signatory changes knows the required documentation and internal approval workflow.

What Happens If You Dont Update the Register?

Failure to keep the signatory list current can lead to:

• Bank account freezes or delayed payments.
• Regulatory fines for noncompliance with KYC/AML obligations.
• Legal challenges if a contract signed by an unauthorised person is contested.
• Reputational damage with partners who may view the oversight as a governance weakness.

Conclusion

Changing an authorised signatory is a routine corporate activity, yet it carries significant compliance and operational implications. By following a structured processidentifying the need, securing board approval, updating internal records, notifying external parties, and maintaining a thorough audit trailcompanies can minimise risk and ensure smooth continuity of business operations. Regular reviews and clear internal policies are the foundation of an effective signatory management system.

For more detailed guidance tailored to your jurisdiction or industry, consider consulting a corporate lawyer or a compliance specialist.