Binding A Corporation

In most cases, only the president of a corporation is authorized to bind the corporation in contractual matters. Florida cases make clear that a shareholder, by virtue of being a shareholder alone, may not bind the corporation by his or her actions. Although ultimate control of the corporation rests with the shareholders, shareholders lack the statutory authority to sign contracts on behalf of the corporation. The lack of a shareholder’s authority to bind a corporation was recognized in a 1961 Second District Court of Appeals decision which was subsequently affirmed by the Florida Supreme Court. The Second District Court of Appeals covers the Tampa Bay area including Pasco and Pinellas Counties.

A member of the board of directors, acting alone, is likewise without authority to bind the corporation in contract matters. Directors exercise their management powers only when duly convened as a board, or when acting by unanimous written consent. Directors may not exercise their powers in committees or acting alone. An act of the majority of the members of the board present at a meeting at which a quorum is present constitutes an act of the board of directors. In a 1982 appellate case, the court held that a corporate secretary and treasurer were without authority to contractually bind a corporation.

Indeed, the court noted that the secretary of a corporation is a ministerial officer, without authority to transact the business of the corporation upon his volition and judgment. It should be noted; however, that the board of directors may expressly granted the power to bind the corporation to such corporate officers.

I personally represent a select number of employers facing employment law claims in both federal and state court as well as before various administrative agencies such as the EEOC and the Department of Labor. Referrals are always appreciated.