Signatories play an essential role in getting legal agreements across the line. But what is a signatory, and how are they involved in the contract process? Let's find out.
What is a signatory?
A signatory is a title used to describe someone that has signed or will sign a legal agreement of some kind. Each contract can have multiple signatories, and each will assume the rights and responsibilities outlined in the agreement once it has been signed.
Historically, the term signatory was used to describe countries that have signed a convention or a treaty, but today this terminology can be used to describe any person, organization, or country that is invited to sign an agreement.
What is the difference between a signature and a signatory?
Put simply, the term signatory is used to describe a legal entity (e.g an individual, company or organization) that is expected to sign a contract.
By comparison, a signature is a mark or copy of the signatory’s name that is used to signify the approval of the person signing the agreement, and they can come in the form of a wet ink signature or an electronic signature.
Typically, a signature will appear in the form of a person’s name, written in a distinctive way. This is so that the signature can be used to identify the document signers.
What is a co-signatory?
The term ‘co-signatory’ is fairly self-explanatory. A co-signatory is someone that is responsible for signing a document jointly alongside others. This group will collectively be referred to as ‘co-signatories’.
Who can be a signatory?
Technically, anyone who can legally sign a contract is capable of being a signatory. This means that everyone is entitled to sign a contract, unless there is an exception that says otherwise. If an exception does exist, that individual will be incapable of acting as a signatory.
For example, certain types of business contracts will only be capable of being signed by someone with the appropriate signatory authority. Similarly, individuals under the age of 18 can’t enter a contract in certain jurisdictions, so they may not be able to act as a signatory to agreements, or someone might need to act as a signatory on their behalf.
Similar rules also apply to those that are defined as having a mental disability, have been declared bankrupt, or are intoxicated, so it is worthwhile checking who can and can’t be a signatory to your contracts.
What is an authorized signatory?
An authorized signatory is a designated individual who has been given the right to sign, either individually or jointly, on certain matters, often on behalf of a company. Typically, an authorized signatory will be a role delegated by the board, and the authorized signatory can be anyone that they select, from managers to employees or even third parties.
Examples of authorized signatories
1. Company signatory
The most common type of authorized signatory is a company signatory. This is used to describe someone who is entitled to sign, execute and approve business contracts on behalf of a company. A company’s director tends to be the authorized signatory, but this can vary.
2. Check signatory
A check signatory is an individual that is authorized to sign checks on behalf of businesses and other organizations. Their responsibilities typically include ensuring the legitimacy of checks before signing, and that they have been prepared properly. Most often, business owners, accountants, and other corporate officers take on the role of being a check signatory.
3. Bank account signatory
An authorized signatory on a bank account is someone who has been authorized to manage someone else’s account on behalf of them. Typically, these signatories will have equal rights to account holders, and they will have the authority to sign checks, check an account balance, access transaction history, cancel payments and close the account.
How to set up a signatory in Juro
So you’ve created a contract in Juro’s purpose-built contract editor. Congrats! But what next? Well, it’s time to add one or more signatories. Fortunately, setting up signatories for a contract couldn’t be easier for Juro users. Hit the button below if you'd like to try it for yourself, or keep reading to learn more.