Collective signature of two persons
The term “collective signature” means that the signature of two persons who are both entitled to sign collectively is required for the legally valid signing of agreements.
The collective signature limits the power of representation of the persons concerned. This limitation is often motivated by the intention of mutual control. The registration of collective signing rights can therefore be particularly useful if important business decisions are not only to be taken jointly, but the corresponding legal act is also to be concluded jointly.
This prevents financially important matters from not being concluded by a person authorised to sign on his own initiative.
One disadvantage of this legal mechanism is that certain processes are slowed down and urgent contracts can only be concluded under more difficult conditions. For example, if a limited liability company has only two managing directors who are authorised to sign collectively, no contract can be concluded without the participation of both persons.
Finding the balance between control and agency is always a great challenge, both for new and experienced entrepreneurs.
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