THE RIGHTFUL SIGNATORY

Once upon a time, the chairman of a company passed away. As the founder and patriarch of the family that owned the business, his death triggered a scramble for control among the shareholders—his own family members.

Two factions emerged. On one side was the eldest sibling, who also served as the company’s President, backed by several of their siblings. On the other was the Corporate Secretary—another sibling—who allied with their mother, the Vice Chairperson.

Each faction held its own special stockholders’ meeting, electing separate boards of directors. This led to a critical question: Which board was the rightful one?

The Corporate Secretary argued that only they had the authority to call and certify stockholders’ meetings, making their board election valid. Meanwhile, the President contended that their group held a larger share of voting rights, making their election the legitimate one.

So, who was right? This is an ongoing case.

The Real Estate Connection

In company-owned real estate transactions, many assume that the most powerful figure—be it the President, Chairman, or the largest shareholder—is automatically the authorized signatory for closing documents. However, as this story illustrates, that’s not necessarily the case.

The ultimate authority rests with the board of directors, who represent the shareholders and collectively decide who can sign on behalf of the company. Even if one person holds the largest stake, the combined votes of other shareholders can override them.

This is why a Secretary’s Certificate is required in such transactions. This document, issued by the Corporate Secretary, certifies that a board resolution was passed to designate an official signatory. However, if the Corporate Secretary is named as the signatory, the Secretary’s Certificate alone may be considered self-serving. In such cases, a Board Resolution signed by all board members is necessary to validate the appointment.