What is a Special Signatory

This is an article about the functions of a Special Authorized Signatory and the difference from a Special Recipient of Service.

Signing Authority in Limited Companies – A Crucial Part of Corporate Structure

When starting a limited company, it's essential to understand how signing authority works. Signing authority refers to the right to sign contracts and other legal documents on behalf of the company. This right can be assigned to different individuals, which plays a vital role in how the company is governed and represented externally. It's also important to distinguish between roles like a special signatory and a special recipient of service, as these have different responsibilities and powers.

What is Signing Authority?

Signing authority is the right to represent and legally bind the company in both legal and financial matters. In a limited company, this right can be granted to different individuals based on the decisions of the board.

Typically, the company is represented by the entire board, but the board may also appoint one or more special signatories to handle this responsibility. These decisions are crucial for avoiding ambiguity about who has the authority to make decisions on behalf of the company.

Tomas Friman - Särskild Delgivningsperson

Special Signatory

A special signatory is a person appointed by the board of a limited company to sign documents on the company’s behalf. This individual can act independently within the limits set by the board. The special signatory could be a board member, the managing director (CEO), or another person assigned to this role. A special signatory may be authorized to sign alone or in conjunction with others, depending on the board’s decision.

For example, the special signatory is authorized to sign contracts, enter into business agreements, and manage other legal matters on behalf of the company. It is important to clearly define the authority of a special signatory to avoid misunderstandings and potential legal issues. Signing authority must also be registered with the Swedish Companies Registration Office (Bolagsverket) to be valid against third parties.

Special Recipient of Service

A special recipient of service, on the other hand, is an individual appointed to receive legal documents and notifications from authorities on behalf of the company. This is a distinct role from signing authority, as the recipient of service has no power to sign contracts or make decisions on behalf of the company. The special recipient of service serves an administrative function and ensures that legal documents, such as notifications from authorities, are received by the appropriate person.

Having a special recipient of service is particularly important if the company is not based in Sweden or if there is a need to ensure that legal documents are always received by the right individual. The board may appoint a special recipient of service who does not necessarily need to be a board member or a special signatory.

The Difference Between a Special Signatory and a Special Recipient of Service

The difference between a special signatory and a special recipient of service lies in their functions and responsibilities:

Special Signatory: Has the authority to bind the company by signing contracts and making decisions in the company’s name. This role is active and involves representing the company externally in business matters.
Special Recipient of Service: Does not have the authority to sign or make decisions but acts as a contact person for receiving important legal documents and notifications on behalf of the company. This role is more administrative.

The Board’s Responsibility and Registration with the Companies Registration Office

The board of a limited company is responsible for appointing both signatories and recipients of service, depending on the company’s needs. Both roles must be registered with the Swedish Companies Registration Office to be valid and publicly visible. This ensures transparency and clarity about who has the authority to represent and communicate on behalf of the company.

Summary

Signing authority is a key part of how a limited company operates, and appointing the right person for this role is crucial to the company’s success. A special signatory has the authority to sign contracts and make decisions, while a special recipient of service has an administrative role in receiving legal documents. Both of these roles are important for ensuring a smooth and clear corporate structure, but they serve different functions and have different responsibilities.

Source: Bolagsverket