Who can sign for the company? How the management clause in the articles of association allocates power among partners

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Every partnership begins with a question few business owners stop to answer in writing: who can sign for the company, and how far does that authority go?

While the company is small and the partners get along, the answer seems obvious — “we decide together.” The problem comes later: when one partner closes a million-real contract alone, when the bank demands to know who has authority over the account, when two partners disagree about a sale, or when one of them has to step away and nobody knows who takes over what.

The management clause in the articles of association identifies who manages the company, what they may decide individually and what requires approval or joint signatures. Clear wording supports daily operations and reduces uncertainty about authority and liability. Omissions can contribute to disputed contracts, accounts without an authorized representative and stalled transactions. The solution is a structure suited to the business and supported by operational controls, not a fixed number of paragraphs.

This article explains clauses that limit authority, clauses that allocate responsibilities in specific areas, and their effects on dealings with banks, registries, counterparties and the company itself.

What does the law say when the articles of association are silent?

Article 1,013 of the Brazilian Civil Code provides for separate management by each partner in a sociedade simples where the articles are silent; these rules may apply on a supplementary basis depending on the company’s legal framework. It does not mean that every partner in every type of entity may bind the business without limits.

A sociedade limitada, Brazil’s limited liability company, is managed by one or more people, whether partners or not, appointed in the articles or by a separate instrument under article 1,060. Appointment and eligibility requirements must be met before exercising the office.

Before accepting a signature, check the current articles, appointment documents and signing authority. Supplementary rules and decisions reserved to the partners also matter. A clear clause avoids treating ownership of a stake as general authority to contract for the company.

How is a manager appointed: in the articles of association or in a separate instrument?

A manager (administrador) may be appointed in the articles or by a separate instrument. The choice affects appointment, acceptance of office and subsequent changes; it does not itself guarantee an indefinite right to remain in office.

• Appointment in the articles: the manager is identified in the articles, so corresponding changes require an amendment in accordance with the applicable rules.

• Appointment by a separate instrument: the manager takes office by signing an acceptance in the management minute book. If it is not signed within 30 days after appointment, the appointment lapses. Within ten days after taking office, the manager must request registration with the competent registry (article 1,062). These are different deadlines with different starting points.

The voting thresholds have changed in recent years. These are the principal statutory rules for a limitada, subject to valid provisions in the articles and the required decision-making formalities:

Situation	Statutory voting threshold
Appointing a non-partner manager while capital is not yet fully paid in	at least 2/3 of the partners
Appointing a non-partner manager once capital is fully paid in	more than half of the capital
Removing a partner appointed as manager in the articles	more than half of the capital (unless the articles provide otherwise)
Amending the articles of association (including the management clause)	more than half of the capital

Law 13,792/2019 changed the rule for removing a partner appointed as manager in the articles. Law 14,451/2022 changed the appointment rules for non-partner managers and the voting thresholds for amendments. The relevant voting bases and stages must be distinguished: a lower statutory threshold does not automatically override a validly agreed higher threshold. Older articles should be reviewed to distinguish outdated references to the law from contractual choices that remain effective.

What are the three ways to organize management?

Management may be organized through individual authority, joint authority or responsibilities allocated by area, including combinations of these structures. The choice depends on operations, risks and controls. The examples below are illustrative and require legal adaptation; they are not ready-to-use clauses for every company.

1. Management with individual authority

One or several managers may act individually within the authority assigned to each. Individual authority does not necessarily mean a sole manager or unlimited powers.

Works well when: operations require speed and authority, monetary limits and decisions reserved to the partners are clearly defined, including where investors and managers have different roles.

Risk: excessive autonomy without controls can allow one person to assume significant obligations without appropriate checks.

Illustrative wording: “The company shall be managed by [NAME], who may act individually in management and representation matters within their authority, subject to the limits in these articles and matters reserved by law to the partners.”

2. Joint management

For specified acts, two or more managers must sign jointly. The articles should identify those acts and account for applicable statutory exceptions: article 1,014, where applicable, allows for urgent situations in which omission or delay could cause serious or irreparable harm.

Works well when: the partners hold balanced stakes and want mutual control, especially over financial decisions.

Risk: slowness. If everything requires joint signatures, daily operations grind to a halt — imagine needing two signatures to pay the electricity bill.

Illustrative wording: “Managers [NAME 1] and [NAME 2] shall act jointly in the management and representation matters defined in this clause, subject to individual authority and applicable statutory exceptions.”

3. Management by area (responsibilities segregated by partner)

Instead of putting every decision under a single rule, the articles allocate responsibilities by business area to duly appointed managers.

This can be useful for small and mid-sized businesses with complementary skills: one manager handles sales, another finance. Each decides and signs within their authority; significant transactions may require joint action or partner approval.

Illustrative wording: “[NAME 1] shall be responsible for commercial and operational management, including client and supplier contracts up to R$ [AMOUNT] per transaction; [NAME 2] shall be responsible for financial and administrative management within the limits in these articles. Acts exceeding that authority require the prescribed approval or joint signature.”

The appropriate combination depends on the business. Allocating responsibilities by area can both limit powers and give managers autonomy in specific matters.

Which clauses limit each partner’s authority?

Limits establish controls to prevent managers from exceeding their authority. They should be precise, lawful and consistent with the rules for representing the company. Four categories deserve attention:

a) Monetary limits. Each manager may contract individually up to a ceiling; above it, the specified joint signature or approval is required. Related transactions should be considered together to prevent artificial splitting.

“Acts involving obligations exceeding R$ [AMOUNT] shall require the signature of both managers.”

b) Acts requiring joint signatures. Regardless of value, the articles can require joint signatures for loans, guarantees, negotiable instruments or particular banking transactions. The provision must be coordinated with registered authority, the bank’s procedures and legal requirements.

c) Prohibited acts, or acts requiring partner approval. Some decisions fall outside ordinary management and call for a collective resolution. It is prudent to list them expressly, for example:

1. sale or encumbrance of real estate;

2. granting guarantees on negotiable instruments (aval), surety (fiança) or other security for third-party obligations;

3. taking out financing above a certain amount;

4. opening or closing branches;

5. admitting new partners or entering into long-term contracts.

Illustrative wording: “Managers shall not grant aval, surety or other security in the company’s name for third-party obligations without the required corporate approval, without prejudice to liability under applicable law.”

d) Corporate purpose and authority. The corporate purpose and managers’ powers should be consistent. However, the sole paragraph of article 1,015 was repealed by Law 14,195/2021 and must not be cited as the current rule on excess of authority. An act outside the corporate purpose does not automatically cease to bind the company: representation, current law and the third party’s good faith must be assessed.

These clauses reduce the risk of someone committing company assets without appropriate controls. They do not guarantee that every unauthorized act will be ineffective against third parties.

Which clauses expand what each partner can do?

Clauses allocating authority clarify who may do what and help organize operations within defined limits. They can cover five areas:

a) Assigning specific areas to each partner. This is the practical translation of segregated management: the articles formally name the partner responsible for each front (sales, finance, operations, legal, HR), with the power to decide and sign within it. This delivers autonomy with accountability and makes decision-making authority easier to verify.

b) Appointing a non-partner manager. A limitada can appoint professional managers. Article 1,061 requires approval by at least two-thirds of the partners while capital is not fully paid in; afterwards, approval by holders of quotas representing more than half of the capital is required. Eligibility and appointment formalities must also be checked.

c) Arrangements for absence or incapacity. The articles can specify how another duly appointed manager temporarily assumes particular responsibilities. The trigger, duration, authority and approvals must be defined; this is not unrestricted delegation of the office itself.

Illustrative wording: “During a manager’s documented temporary absence, the other manager may perform the acts specified in this clause, within its limits and for the stated period, without assuming non-delegable functions or dispensing with statutory approvals.”

d) Delegating specific powers. Article 1,018 prohibits a manager from substituting another person in the exercise of the office, but permits appointment of attorneys-in-fact within the manager’s own authority, specifying the authorized acts and transactions. A power of attorney may cover, for example, dealings with public bodies or tax matters, subject to a defined scope and conditions.

e) Special authority by subject matter. A manager can be given authority to negotiate tax installment arrangements or hire staff within specified limits, provided they are duly authorized and respect matters reserved to the partners or other bodies.

Allocating responsibilities complements the limits: it gives managers enough autonomy to work without removing necessary controls.

How does the management clause work in practice?

A management clause only fulfils its role when it produces effects in the real world — being on paper is not enough. Three points deserve attention:

1. Registration and disclosure of authority. Appointments and amendments must meet the applicable formalities and registration requirements. A commercial company in São Paulo registers with the JUCESP; a sociedade simples has its own registry rules. Article 1,154 allows proof that a third party knew of an act before registration, subject also to special statutory provisions. Banks and counterparties should receive current documents; it is inaccurate to say that every unregistered arrangement is always ineffective.

2. Managers’ personal liability. Article 1,016 provides for liability for damage caused through fault in the performance of management duties. Allocating responsibilities helps identify duties and conduct, but does not automatically exclude liability or duties inherent in the office.

3. Excess of authority and good-faith third parties. An act exceeding internal limits may create a dispute about whether it binds the company. Representation, the parties’ conduct and the third party’s good faith require assessment. The company may be bound, without prejudice to a possible claim against the manager. Registering acts and communicating limits reduces risks but does not provide immunity.

A practical example: the clause at Tech Move Ltda.

Imagine the fictional company Tech Move Ltda., with two 50% partners: Bruno, who handles sales and client relationships, and Carla, who manages finance and administration. A structure adapted to their roles could provide:

• Bruno manages the commercial and operational area and may close contracts with clients and suppliers up to R$ 50,000 per act (a clause that grants authority, but with a cap that limits it).

• Carla manages the financial area, with sole authority over routine banking up to R$ 30,000.

• Above the monetary limits and for sensitive transactions identified in the articles, joint signatures are required, together with a partners’ resolution where applicable. Admitting new partners also requires the relevant corporate formalities.

• If one manager is absent, the other temporarily assumes expressly authorized responsibilities, within the specified limits and period.

• Both are prohibited from granting aval or surety in the company’s name without a joint resolution (a hard limit).

The amounts are examples only. The aim is to combine efficiency, control and accountability through consistent documents and registration. The arrangement does not guarantee freedom from disputes or replace legal analysis of the company.

The most common (and costly) mistakes

• Silent or generic articles, such as “management by both partners” without saying whether they act individually or jointly. Ambiguity makes authority and controls harder to verify.

• Requiring joint signatures for everything. It paralyzes the operation and pushes the company into informality — the partners start working around their own charter.

• Not planning for a partner’s absence. The company becomes hostage to an unavailable signature.

• Copying old voting thresholds without reviewing them. Outdated references to the law must be distinguished from validly agreed higher thresholds.

• Not registering changes. Lack of disclosure and current documents increases representation risks and potential disputes with third parties.

• Confusing the articles with the partners’ agreement. The articles contain matters subject to public registration. The agreement can develop voting, exit, pre-emption and quota-valuation arrangements; it must be consistent with the articles and meet the formalities needed for the intended effects on the company and third parties.

Checklist: what a good management clause must answer

Before signing, the articles need to make clear:

• Who the managers are and how they were appointed (in the articles or in a separate instrument).

• Which areas and powers are assigned to each manager.

• What each manager may sign individually, and up to what amount.

• Which acts require joint signatures or a resolution of the partners.

• Which acts are prohibited or require authorization.

• What happens when a manager is absent.

• How — and by what quorum — a manager is appointed and removed.

• How the clause coordinates with the partners’ agreement and powers of attorney.

Frequently asked questions about the management clause

Can a partner sign a contract alone on behalf of the company?

It depends on authority to represent the company and the extent of the powers granted. For a limitada, check the articles, appointment and applicable rules. Being a partner does not itself confer unlimited authority. Article 1,013 governs separate management in a sociedade simples and may apply on a supplementary basis, but does not replace analysis of the specific rules for a limitada.

What happens if the articles of association have no management clause?

The omission requires checking the entity type, appointments and supplementary rules. In a limitada, article 1,060 provides for managers appointed in the articles or by a separate instrument. Silence does not mean any partner can contract without limits. Individual authority, joint acts and matters reserved to the partners should be expressly defined.

Where — and by what quorum — is the management clause amended in São Paulo?

An amendment to the articles of a commercial company in São Paulo is registered with the JUCESP. Following Law 14,451/2022, article 1,076 sets a statutory requirement of votes representing more than half of the capital for amendments. Valid provisions in the articles, decision-making formalities and registration effects must be checked; the percentage alone is not enough.

Do I need a lawyer to amend the management clause?

The DREI Manual for Registration of Limited Liability Companies states that a lawyer’s endorsement is not mandatory for amendments to the articles. The general requirement for incorporation and the exemption for ME and EPP are different issues. Although endorsement is not required to register an amendment, legal advice is advisable for consistent drafting of authority, limits, approvals and representation rules.

What is the difference between the management clause and the partners’ agreement?

The management clause forms part of the articles and sets management and representation powers subject to the applicable formalities. A partners’ agreement is a separate document that can detail voting, exit, pre-emption and valuation arrangements. They must be coordinated: confidentiality does not remove formalities needed for particular effects on the company or third parties.

Clear rules for managing and representing the company

Disputes can arise from undocumented expectations: who could decide, why a transaction was signed or who should act during an absence.

A well-prepared clause turns those questions into verifiable procedures. It seeks to combine operational flexibility and legal certainty, without replacing operational controls or guaranteeing that litigation will never arise.

At Falchet e Marques Sociedade de Advogados, a law firm in São Paulo (Av. Paulista), we structure articles of association and partners’ agreements tailored to your business model — balancing autonomy, control and asset protection. If your company has more than one partner, it is worth reviewing whether what is written reflects how you actually want to decide.

Talk to our team on WhatsApp: +55 11 95901-1854 — and organize your company’s management before it becomes a problem.