How should sole, joint, limited and power-of-attorney-based signing authority be distinguished?

In plain language

Imagine a safe. If one key opens it, authority is sole. If two keys must be used together, authority is joint. If a key opens only one drawer, authority is limited. If someone has lent you the key for a defined purpose and period, the arrangement resembles a power of attorney.

Why this matters

The phrase 'authorised signatory' alone does not tell you which transaction may be signed, for what amount, on which date or with how many signatures.

Do not confuse

• The method of signing and the scope of authority are different questions.
• The ability to sign alone does not mean unlimited authority.
• A power of attorney does not authorise the agent to carry out every possible transaction.

What should you do?

1. Record the organisation concerned and the source of the authority explicitly.
2. Store signing method, scope, amount, duration and territory in separate fields.
3. For joint authority, express the required combination in a machine-verifiable form.
4. Verify separately that the principal held the relevant authority and could delegate it.
5. Track expiry, revocation and any applicable registration status.

How do you audit it?

• Does the transaction fall within the stated scope?
• Is the required combination of signatures complete?
• Was the authority valid on the transaction date?
• Have the chain of delegation and the right to delegate been verified?
• Have registration requirements or effects against third parties been assessed?