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 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.
Here’s how to add a signatory once your contract has been created:
Access the ‘Parties’ tab in the contract editor.
You will be given the choice to add signatories to either your company’s side or the other party’s side. Choose which side you want to add a signatory for and simply click ‘+ Add’.
Next, just type in the email addresses of your chosen document signers and press Enter to confirm. Do this for as many signatories you wish to add.
Once you have added your signatories, you should see that a signature block will have been automatically added to the contract, either at the bottom or where the signature block placeholder is.
Not sure who the document signers will be just yet? That’s fine! With Juro, you can create an empty placeholder that can be updated automatically with relevant details once a signatory has been set.
Need to add multiple signatories? No worries! Both parties can add as many signatories as they need using Juro.
What is the role of a signatory in a digital contracting process?
Signatories play a critical role in the digital contracting process, since securing a signature on a contract represents a deal being finalized and revenue being captured. As a result, signatories also have an important role to play in your broader business strategy too, as reaching a signature on a contract is essential to unblocking bottlenecks and helping the company meet its growth targets.
In the absence of effective contract lifecycle management, signatories can become late to signing, or worse, can become reluctant to sign a contract at all, which can prevent important transactions from being finalized and missed opportunities.
That's why many scaling businesses use contract automation, as it makes the contracting process as seamless as possible for the document signer.
Sign contracts faster with Juro
With Juro, signatories and contract managers can create, edit, negotiate, sign and store contracts securely, all in-browser. With eSignature just a few clicks away, Juro's native electronic signature is safe, secure and optimized for signing across any device, which makes life easier for signatories and gets contracts across the line faster.
Want to try it for yourself? Hit the green button below.