How to Add Signatory to Business Account
Adding a signatory to a business bank account allows an additional authorised person to operate or approve transactions according to the account mandate. This is common when a company appoints a new director, finance officer, partner, authorised representative or another person responsible for banking activities.
The process is more formal than simply giving another employee access to online banking. A bank needs to establish that the business has legitimately authorised the person and that the proposed account mandate complies with its requirements.
What Is a Bank Signatory?
A signatory is a person authorised to sign or approve transactions on behalf of an account holder. For a business account, the signatory acts according to the authority granted by the company and recorded by the bank.
The signatory does not necessarily become an owner of the business or the money in the account. Their authority is connected to the account mandate.
Why Add a Signatory?
A company may add a signatory when responsibilities change or when additional people need authority to operate the account.
- A new director joins the company.
- A finance manager takes responsibility for banking.
- An existing signatory leaves the company.
- The business expands its operations.
- More than one person is needed to approve payments.
- The company changes its internal signing arrangement.
Documents Commonly Required
The exact requirements depend on the bank and business structure. A company may need to provide a formal resolution or other evidence showing that the business has authorised the change.
The incoming signatory may also need to provide valid identification and complete the bank’s KYC requirements.
For incorporated businesses, the bank may request corporate records or other documents needed to confirm the company and its authorised representatives.
How to Add a Signatory
- Confirm the bank’s requirements for changing an account mandate.
- Hold the required internal company meeting or approval process.
- Prepare the necessary resolution or authorisation.
- Collect identification documents for the new signatory.
- Complete the bank’s mandate-change forms.
- Submit the required corporate documents.
- Allow the bank to perform its verification.
- Complete signature or biometric verification where required.
- Confirm the new operating mandate.
- Wait for the bank to activate the new signatory.
Can a Signatory Be Added Online?
Some banks may support parts of the process electronically, but changes to business account mandates often require formal documentation and verification.
A company should follow the bank’s current process rather than assuming that a normal mobile banking profile update will create legal authority to sign for the business.
Single and Multiple Signatory Mandates
A business can have different signing arrangements. Under one arrangement, one authorised signatory may be able to approve transactions alone. Under another, two or more signatories may be required.
The business should choose an arrangement that fits its internal controls. Requiring multiple approvals for significant payments can provide an additional layer of protection.
Adding a Signatory Does Not Mean Sharing Passwords
Businesses should never solve an access problem by sharing internet-banking passwords, OTPs, PINs or other private credentials. A new authorised person should be registered through the bank’s approved process.
Proper account access provides clearer accountability because transactions can be associated with authorised users and appropriate permissions.
What Happens After the Signatory Is Added?
The bank may update the account mandate and enable the signatory to perform specific transactions. The exact permissions depend on the mandate.
The company should verify that the new signatory has the correct authority and that any former signatory who has left the business has been removed where appropriate.
How to Remove an Old Signatory
When an employee, director or partner no longer has authority to operate the account, the business should promptly notify the bank. This is particularly important when the person has access to payment instruments or electronic banking.
Do not wait until a dispute occurs before updating the bank’s records.
Common Mistakes
- Failing to obtain the required corporate approval.
- Submitting incomplete identification documents.
- Leaving former employees as authorised signatories.
- Using a signing mandate that does not match company policy.
- Sharing banking passwords instead of creating proper access.
- Failing to confirm that the mandate has been activated.
Frequently Asked Questions
Can an employee become a business account signatory?
Yes, if the business authorises the person and the bank accepts and registers the appointment.
Does adding a signatory make that person an owner?
No. Signing authority and ownership are different concepts.
Can a company have two signatories?
Yes. Businesses can have multiple authorised signatories, subject to the bank’s requirements and the account mandate.
Can a signatory be removed?
Yes, businesses can normally request a mandate change when a person’s authority ends, subject to the bank’s procedure.
Conclusion
Adding a signatory to a business account should be handled as a formal mandate change. The company should approve the appointment, provide the required documentation and ensure the bank updates its records before the new signatory begins operating the account. Proper mandate management helps reduce unauthorised transactions and makes responsibility clearer.