Can the person signing actually bind the company?

A deal is agreed over weeks, the document is signed, and everyone moves on. Months later, when it matters, the other company says the person who signed had no authority to sign it.

This is not usually a scam. It is usually a manager who genuinely believed they could commit the business, a director who needed board approval nobody mentioned, or a shareholder who forgot there were two others whose consent was required.

The result is the same either way: you thought you had an agreement and you have an argument.

Seniority is not authority

The person with the most impressive title is not necessarily the person who can bind the company. The two come apart constantly:

• A general manager may run everything day to day and have no power to dispose of assets or sign long-term commitments.
• A single director of a company with several directors may need a board resolution for transactions over a threshold, or of a particular kind.
• A shareholder may have no management authority at all. Owning the company and running it are different things.
• A branch or country manager of a group may be able to commit the local entity and not the parent whose name is on the letterhead.

The checks worth doing

For an ordinary trading agreement, confirming the company exists and the signatory is a director is usually proportionate. For anything substantial — a long commitment, a large sum, property, a disposal, exclusivity — do more.

Confirm the entity. Get the registered name and number and check them against the register. The name on the letterhead is often a trading name, not the registered entity, and you need the registered one on the agreement.

Confirm the directors. Check that the person signing is who the register says they are. Registers lag reality, so also ask the company to confirm current directors in writing.

Ask for the resolution. For anything material, ask for a board or shareholders’ resolution authorising this transaction and naming the signatory. A company acting properly will have one or can produce one quickly. Reluctance to provide it is itself information.

Read the constitutive documents. Companies in Zimbabwe are governed by the Companies and Other Business Entities Act [Chapter 24:31], and a company’s own documents may add requirements — thresholds above which board approval is needed, matters requiring unanimous shareholder consent, restrictions on borrowing or giving security. Those documents are where the real limits live.

Find the other shareholders. Where ownership is split, a deal agreed by one owner is not a deal. This is the most common failure in small-company transactions and the easiest to check: ask who else owns this, and get their agreement in writing.

The warning signs

None of these prove anything on their own. Together they justify slowing down:

• Pressure to sign before you can verify anything.
• A signatory who cannot say plainly what their authority is.
• A refusal to produce a resolution for a material transaction.
• The registered entity differing from the name you have been dealing with.
• Shareholders who are mentioned but never available.
• A document signed but not stamped or witnessed as the company’s own documents require.

What to do about it

Put the answers in the agreement. A clause in which the signatory warrants that they are authorised, that the company has taken all required internal steps, and that the information given is accurate costs nothing to include and changes the position considerably if it later turns out to be untrue.

Attach the resolution as an annexure. Keep the correspondence. Make sure the registered name, not the trading name, is the party.

An hour of this at the start is cheaper than any amount of arguing about it afterwards — and in most cases the answer comes back clean, which is also worth knowing.

This note is general information, not advice on your situation, and it is not legal advice. Where the transaction is large enough that enforceability matters, have a registered legal practitioner review the document itself. If you want the party, the authority and the facts checked before you commit, that is work we do.