What is the difference between a founder, owner, manager, employee, legal representative and authorised signatory?

In plain language

Think of a theatre. The person who started it may be the founder. Someone else may own the building, another person may manage the company, the performers may be employees, a representative may negotiate contracts, and an authorised signatory may sign them. One person can do several of these jobs, but the jobs do not mean the same thing.

Why this matters

Confusing roles creates the wrong authority, the wrong accountability and the wrong representation. The label 'founder' does not by itself give someone the present right to sign a contract for the company.

Do not confuse

• Ownership is an economic or legal interest; management is a function with defined duties and authority.
• Being an employee does not confer authority to represent the organisation.
• Legal authority to represent and authority to sign a particular document may differ in scope and evidential basis.

What should you do?

1. Manage each role as a separate record with start and end dates.
2. Link the role to the decision, contract, register entry or power of attorney on which it rests.
3. Store the role and the scope of authority in separate fields.
4. When a person leaves, review every authority attached to that person separately.
5. Distinguish the current role from historical roles in web and machine-readable records.

How do you audit it?

• Is it clear which role the person held and on which dates?
• Are the basis of the role and the authorising body identified?
• Has an owner or founder been treated automatically as an authorised signatory?
• Is an ended role still presented as current?
• Have several authorities been inferred from a single role label?