Authority To Represent Explained: Australian Legal Essentials

Running a business in Australia often means asking trusted people to act on your behalf. That might be a manager signing a supplier contract, an agent lodging paperwork with ASIC, or a consultant dealing with a regulator for a specific task.

When those people act, you want to know the action is valid and binding. That’s where authority to represent comes in. Putting clear, written authority in place helps you move faster, reduce risk, and give third parties confidence they’re dealing with the right person.

In this guide, we’ll explain what authority to represent means in Australian law, the common ways to grant it (including the Corporations Act mechanisms), when you’ll need it, what to include in an authority document, and the governance steps to manage risk as you grow.

What Does “Authority To Represent” Mean In Australia?

Authority to represent is the legal power you give someone to act on your behalf. In a business context, this can cover signing documents, negotiating contracts, lodging forms with regulators, or communicating with banks and suppliers.

That authority can be broad or narrow. For example, you might authorise your operations manager to sign routine purchase orders up to a certain amount, or you might authorise an external adviser to liaise with a regulator only for a specific application.

The key point: if a person acts within the authority you’ve granted, their actions can bind the business. If they act without authority-or outside the stated limits-you may face disputes about enforceability or be exposed to unnecessary risk.

How Is Authority Granted Under Australian Law?

There isn’t a single method that suits every situation. The right approach depends on your structure, the nature of the decision, and who is carrying it out. Below are common (and legally recognised) ways to grant authority.

1) Company Execution Under Section 127

For companies, one way to ensure documents are validly executed is to follow the Corporations Act 2001 (Cth) execution rules. Under section 127, a company can sign by:

• Two directors; or
• A director and a company secretary; or
• A sole director who is also the sole company secretary (for single-director companies).

If you execute a document in line with section 127, third parties can generally rely on statutory assumptions that the document was properly executed. Importantly, a company secretary alone does not have a general standalone power to execute documents for the company under section 127.

2) Authority Given Under Section 126

Companies can also authorise individuals-such as officers, employees, or agents-to enter into contracts on the company’s behalf. This is recognised by section 126 of the Corporations Act.

In practice, this authority is usually granted by a board resolution, a written instrument (like an authority letter), or by setting clear delegations in your governance documents. When relying on section 126, be specific about the scope (what the person can do) and any limits (transaction value, time period, subject matter).

3) Company Constitution and Internal Delegations

Your company’s internal rules can set out who can act and how. Many businesses put signing rules, delegations and approval thresholds in their Company Constitution, as this provides clear, central guidance. You can back this up with board-approved delegation schedules and role descriptions.

4) Board or Director Resolutions

If you need to appoint someone to act for a particular matter or period, record it with a formal resolution. A tailored directors’ resolution can authorise a named person to execute a specific agreement, manage a transaction, or liaise with a regulator within defined limits.

5) Written Authority Documents

For day-to-day scenarios-like letting an employee sign a lease addendum or letting a consultant lodge forms-use a clear written instrument. Depending on the situation, this could be an internal authority letter, a short-form delegation, an authority to act form, or a more specific letter of authority to act.

6) Power of Attorney (When Appropriate)

For broader or longer-term powers (particularly involving property or finance), a power of attorney can be appropriate. Keep in mind these are governed by state and territory laws and have specific execution and witnessing rules. If you’re considering a power of attorney, it’s worth getting tailored advice so the instrument is valid in the relevant jurisdiction and fit for purpose.

Note on witnessing: ordinary authority letters or internal delegations typically do not require witnessing. Deeds and powers of attorney can carry specific execution and witnessing requirements-these vary by law and document type.

When Will You Need Authority To Represent?

You should consider putting written authority in place whenever someone will act for the business beyond their obvious day-to-day role, or where third parties need assurance. Common scenarios include:

• Signing supplier, customer, lease or services agreements (particularly higher-value or strategic contracts).
• Lodging documents or communicating with regulators (for example, ASIC filings, industry licences or permits).
• Authorising a professional adviser to act for a specific task (such as a legal or compliance project).
• Negotiating and settling commercial issues or variations with external parties within defined parameters.
• Communicating with banks or payment providers about your business accounts or facilities.

If you’re dealing with tax, the Australian Taxation Office usually requires its own nominated authorisations for tax agents or BAS agents. This process is separate to legal authority within your company, and you should seek guidance from your registered tax or BAS agent for the correct ATO authorisations and tax-related advice.

For companies with multiple owners, clarify decision-making powers across directors and senior managers. In addition to your constitution, a Shareholders Agreement can set thresholds for major decisions and document who can authorise certain actions.

What Should An Authority To Represent Document Include?

A clear, written authority avoids confusion and helps third parties verify the person they’re dealing with. Whether you’re preparing an internal delegation, a short-form authority letter, or a targeted authority to act form, cover the essentials:

• Grantor: the name and details of the entity or person granting the authority (e.g. the company).
• Authorised person: the representative’s full name, role, and contact details.
• Scope of authority: what the person is permitted to do (e.g. sign a specified agreement; negotiate within set parameters; lodge stated forms).
• Limits and thresholds: value caps, subject-matter limits, approvals required before certain actions, or exclusions (e.g. no authority to terminate key contracts).
• Time period: whether the authority is one-off, time-bound for a project, or ongoing until revoked.
• Execution and evidence: how the authority is executed (e.g. board resolution plus authority letter) and what proof third parties may request (ID, copy of resolution).
• Revocation: a simple clause that the authority can be withdrawn at any time by notice.

For companies, decide whether you’ll rely on section 126 appointment (authorising a person to contract on the company’s behalf) or execute the document under section 127 to give counterparties additional comfort. The right option depends on the type of document and the counterparty’s preferences.

Practical Tips For Smooth Execution

• Keep a central register of all active delegations, authority letters and resolutions.
• Use consistent templates across the business so third parties see familiar, professional documents.
• Make sure your internal rules (including your Company Constitution) align with how you actually grant and manage authority.
• Where needed, provide counterparties with a copy of the relevant directors’ resolution or authority letter to speed up onboarding.

Managing Risk: Governance, Oversight And Revocation

Granting authority helps you move quickly, but it needs guardrails. Good governance reduces the chance of disputes, fraud or accidental overreach.

Set Clear Boundaries

Define what the representative can and cannot do. Think about dollar limits, categories of transaction, approval pathways, and whether a second sign-off is needed for certain actions.

Record Decisions

Use resolutions and written instruments to document each grant of authority. Store them in a central, access-controlled location. Good records are invaluable if you ever need to prove a decision or investigate an issue.

Review Regularly

Authorities should evolve with your business. Review them when roles change, after restructures, or when you add new locations or business lines. Remove access promptly when people leave or change roles.

Communicate With Third Parties

When you appoint or remove an authorised person, let relevant third parties know in writing-especially banks, key suppliers and platforms. If you’re relying on section 126, be prepared to provide copies of the authorising document if requested.

Revoke When Needed

Authority can usually be revoked at any time (unless you’ve agreed otherwise in a specific instrument, such as a limited power of attorney). Revoke in writing and keep a record of all notices sent and acknowledgements received.

A Note On Representation In Disputes

Authority to represent can include negotiating or settling commercial issues. Court representation, however, is a separate step that involves court rules and appointments. If litigation is on the table, seek tailored legal advice about the appropriate representation and process for your matter.

Working With Regulators And Industry Bodies

Regulators often ask for proof that the person contacting them can act for the business. Examples include ASIC filings, licence applications, or access to government portals.

• Some regulators provide their own authority forms. Follow those processes first, as they may override your internal formats for the purpose of that agency’s systems.
• For tax matters, the ATO has specific authorisation procedures for registered tax or BAS agents. This is separate from your internal delegations, and you should rely on your tax professional to put the right ATO authorisations in place.
• If no regulator form is available, a clear internal authority letter or targeted letter of authority to act is usually acceptable, along with a supporting resolution if needed.

As your operations expand, consider formalising sign-off pathways and documenting who can engage with specific regulators and for what purposes. This saves time and ensures consistency.

How Business Structure Affects Authority

• Sole trader: you can authorise others using a simple written authority or (for significant financial/property matters) a power of attorney subject to the relevant state or territory rules.
• Partnership: partners usually have implied authority within the scope of the partnership, but a written partnership agreement should set clear limits and approval thresholds.
• Company: use a mix of the Corporations Act tools (section 127 execution; section 126 authority), your constitution and resolutions to manage delegations consistently.
• Trust: the trustee acts for the trust. Check the trust deed and put trustee resolutions and written delegations in place before authorising others to act.

Related Documents To Consider

In addition to your authority instruments, a handful of core documents help keep decision-making tidy and transparent as you grow:

• Company Constitution: sets internal rules on signatories, delegations and governance.
• Shareholders Agreement: clarifies who can authorise major decisions and how approvals work among owners.
• Directors’ Resolution: records decisions and approvals to grant or change authority.
• Authority to act form or targeted authority letter: documents the person, scope, limits and timeframe.

Key Takeaways

• Authority to represent is the legal power you give someone to act on your behalf; when used well, it speeds up decisions and reduces risk.
• For companies, two key Corporations Act tools are available: execute documents under section 127 or authorise individuals under section 126-choose the right one for the situation.
• Set out authority in writing with clear scope, limits, timeframes and a simple revocation pathway; keep a central record of all active delegations.
• Make sure your governance documents-like your Company Constitution, board resolutions and (if relevant) your Shareholders Agreement-align with how you grant authority day to day.
• Regulators and banks may require proof of authority; some agencies (like the ATO) have their own authorisation processes that sit alongside your internal delegations.
• Review and update authorities when roles change, and communicate appointments and revocations to relevant third parties to avoid confusion.

If you’d like a consultation or help drafting a tailored authority to represent document for your business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.