May A Non-Officer Sign A Contract Binding An S Corporation?

Yes.  A non-officer may contract on behalf of an S corporation, or a c corporation; the corporate bylaws should reflect who is authorized to contract on behalf of the corporation; if it does not the directors can vote to amend the bylaws.  Often such authority is limited to one or two officers.  

C and S corporations are both governed by the California Corporations Code and by their bylaws, which can provide, for example that one or more of the corporation’s officers need to sign every contract.

People who do business with your corporation are allowed to assume that those who sign for the corporation have authority to do so. Corporations Code Section 313 says that as long as a corporate officer signs the agreement, it’s valid and the signing officers will be deemed to have apparent authority, even if the signing officers lacked actual authority, unless the other party knew that the signing officers lacked authority to execute the document.


Recent Posts