My partner signed a contract without my authorization: is the company required to honor it?

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You suddenly find out that your partner closed a heavy contract on their own — a supplier, a loan, a multi-year lease — without consulting you. The question comes in a panic: is the company required to honor it?

The honest answer is the one no one wants to hear: often, yes — at least vis-à-vis the third party who signed in good faith. Brazilian law protects those who contract with the company relying on the apparent authority of whoever signed. This does not mean the partner who overstepped walks away unscathed; it means that, at first, the bill may fall on the company, which may then claim against the one who acted alone.

This article explains when a contract signed by a partner binds the company, when it does not and what to do upon discovering such an act. The cost of inaction is twofold: either the company honors a contract it did not want, or it enters a dispute that could have been avoided with one clause and one registration.

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

Article 1,013 provides a default rule for sociedades simples, not unrestricted authority for every owner of any company. For a limitada, art. 1,060 requires checking managers appointed in the articles or a separate act. It is the first thing to check: what your articles of association actually say about who may sign what.

The absence of a value cap does not authorize someone who lacks representative powers. If the articles require joint signature or cap amounts, then the discussion changes — and the concept of exceeding powers comes into play.

Does a contract signed beyond the granted powers bind the company?

Even when the partner exceeds the limits of the articles, the company may be bound vis-à-vis third parties. This is because, if the act falls within the corporate purpose and the third party contracted in good faith — without knowing of the internal limitation —, the company tends to be liable, and may then claim against the partner who exceeded their powers.

There are, however, important counterpoints:

• Corporate purpose and powers must be assessed under current rules: the sole paragraph of art. 1,015 was repealed by Law 14,195/2021 and cannot automatically exclude the company's obligation.
• Limitations registered with the Board of Trade and known to the third party weaken their good faith.
• Personal liability: manager liability requires fault in performing duties, loss and a causal link (art. 1.016 of the Brazilian Civil Code).

The purpose of this is simple to explain: the limit on paper protects the partners among themselves and against anyone who knew of the restriction; but, faced with a good-faith third party, what closes the door is the registration and the notification of the limit.

On paper vs. effective against third parties: why registration decides

There is a crucial difference between what the articles arrange internally and what is effective against the outside world. An act requiring registration is generally unenforceable before the formalities unless actual knowledge is proved (Civil Code art. 1,154); registration matters for joint-signature rules — in São Paulo, with JUCESP. It is the registered articles that the bank checks to learn who may operate the account.

For this reason, "we agreed he would not sign alone" is not enough. The third party's actual knowledge may matter, but it must be proved. What binds is the registered articles — and, ideally, notification of the limits to the most relevant partners (banks, strategic suppliers).

Hypothetical example: Construeli and the R$ 200,000 contract

At Construeli Ltda., the partners Marcos and Rafael have a management clause requiring joint signature for contracts above R$ 100,000 — duly registered with JUCESP. Marcos, on his own, signs a supply contract for R$ 200,000.

Because the limit was registered, the supplier could have known of it: the company has a strong argument to challenge the binding effect, but Marcos's personal liability requires proof of the legal requirements. Now reverse it: if the clause had not been registered and the supplier acted in good faith, Construeli would probably have to honor the contract and then claim against Marcos. Registration matters, but does not alone determine the outcome: knowledge, authority, performance and any ratification must be examined.

The most common (and costly) mistakes

• Confusing ownership with management, without checking appointment and authority.
• Limiting the signing power on paper but failing to register it with the Board of Trade — enforceability requires reviewing art. 1,154 and evidence of knowledge.
• Failing to notify banks and suppliers of who may sign.
• Being slow to react upon discovering the act, giving the appearance that the company ratified it.
• Confusing the internal problem (among partners) with the validity of the act vis-à-vis the third party.

Checklist: what to check upon discovering a contract signed alone

• Do the articles of association limit powers and require joint signature? Are they registered?
• Does the act fall within the company's corporate purpose?
• Did the third party know or could they have known of the limitation?
• Does the amount exceed any cap set in the articles?
• Are there grounds to hold the partner personally liable (art. 1.016)?
• Should the company formally state its position so as not to appear to have ratified the act?

Frequently asked questions about a contract signed by a partner without authorization

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

It depends on authority, not ownership alone. Article 1,013 belongs to the rules for sociedades simples; for a limitada, check the managers appointed under art. 1,060, its articles and any powers of attorney. If the articles limit powers or require joint signature, the partner who signs alone is exceeding their powers — but that does not always unwind the contract vis-à-vis good-faith third parties. It is the registered clause that makes the difference.

Is a contract signed by a partner without authorization valid?

It may be valid vis-à-vis the third party, even if internally irregular. If the act falls within the company's corporate purpose and the third party acted in good faith, the company is usually bound and may then claim against the partner who overstepped (art. 1.016 of the Brazilian Civil Code). If the limit was registered with the Board of Trade and was known, or if the act is foreign to the corporate purpose, there are grounds to challenge the binding effect.

How can I prevent my partner from signing contracts alone?

With a management clause in the articles of association that defines who signs what, sets value caps and requires joint signature for sensitive acts — and, above all, with the registration of that clause with the Board of Trade. It is also worth notifying banks and strategic suppliers of the limits. A partners' agreement can reinforce veto rules over important decisions.

In São Paulo, where do I check the powers of a company's partners?

At JUCESP (the Board of Trade of the State of São Paulo), where the articles of association and their amendments are registered. That is where banks and partners check who may sign and operate accounts. For this reason, an act requiring registration is generally unenforceable against a third party before the formalities, unless actual knowledge is proved; after registration, ignorance cannot be claimed (Civil Code art. 1,154). Other entity types may use a different registry.

When should I seek a lawyer in this kind of shareholder conflict?

As soon as you discover an act signed outside the powers granted, or at the first sign that a partner is acting on their own. The earlier, the more options: analyzing the validity of the contract, holding the partner personally liable, adjusting and registering the management clause and, if necessary, taking judicial or out-of-court measures. Delay may be interpreted as acceptance of the act.

Who decides what must be in writing — and registered

A contract signed by a single partner exposes a weakness that almost always predates the problem: the lack of clear and registered rules about who may sign for the company. Resolving the case at hand is important; more important is closing the gap so that it does not happen again.

At Falchet e Marques Sociedade de Advogados, a firm in São Paulo (Av. Paulista), we analyze the validity of acts signed by partners, structure management clauses and partners' agreements and act in shareholder disputes — protecting the company and the assets of those who run it.

Talk to our team on WhatsApp: +55 11 95901-1854 — send us the articles of association and the signed document so we can assess the validity of the act and the available measures.