Who can sign for the company? How the management clause in the articles of association allocates power among partners

Every partnership begins with a question few business owners stop to answer in writing: who can sign for the company, and how far does that authority go?

While the company is small and the partners get along, the answer seems obvious — “we decide together.” The problem comes later: when one partner closes a million-real contract alone, when the bank demands to know who has authority over the account, when two partners disagree about a sale, or when one of them has to step away and nobody knows who takes over what.

The management clause in the articles of association (also called the administration clause) is the section of the company’s charter that answers this question definitively. In a few words, it is the rule that says which partners manage the company, what each may decide alone and what requires a joint decision. Well drafted, it gives the day-to-day operation agility and gives everyone security. Poorly drafted — or absent — it becomes the source of a large share of the partnership disputes that end up in court. The cost of inaction here is concrete: contracts signed by the wrong person, frozen accounts, stalled deals and fights that three well-written paragraphs could have prevented.

In this article, we show how these clauses work: the ones that limit each partner’s authority, the ones that expand the situations in which each partner may run a specific area, and how all of this plays out in practice — at the bank, at the notary’s office and in the personal liability of whoever manages the company.

What does the law say when the articles of association are silent?

When the articles of association say nothing about management, the law presumes that each partner may manage and sign for the company alone (art. 1,013 of the Brazilian Civil Code). The contract’s silence does not create control — it distributes power broadly and almost without restriction.

Before designing the ideal clause, you need to understand the starting point. In the sociedade limitada — Brazil’s LLC-type company and the format used by more than 90% of Brazilian businesses — management may be exercised by one or more persons, partners or not, appointed in the articles of association themselves or in a separate instrument (art. 1,060 of the Civil Code).

And here is the detail that catches many partners off guard: without a specific clause, any partner may take decisions and sign for the company alone — including high-value contracts. That is why “we’ll sort it out later” is so risky. The management clause exists precisely to replace this generic rule with an arrangement designed for the reality of the business.

How is a manager appointed: in the articles of association or in a separate instrument?

A manager (administrador) may be appointed in two ways, with different effects: within the articles of association themselves or in a separate instrument (minutes or a term of appointment). The choice changes how stable the position is and how easy it is to replace the manager.

• Appointment in the articles of association: the manager is named in the charter itself. It is the most stable form; on the other hand, any change requires a formal amendment.

• Appointment in a separate instrument (minutes or term): the manager is appointed outside the articles, takes office in the company’s records and the appointment is filed with the Board of Trade within the following 30 days (art. 1,062 of the Civil Code). It is more flexible for replacements and reappointments.

The approval quorums for these decisions have changed in recent years. Today, in the limitada, they work like this:

Situation	Current quorum
Appointing a non-partner manager while capital is not yet fully paid in	2/3 of the partners
Appointing a non-partner manager once capital is fully paid in	more than half of the capital
Removing a partner appointed as manager in the articles	more than half of the capital (unless the articles provide otherwise)
Amending the articles of association (including the management clause)	more than half of the capital

These reductions came with Law 13,792/2019 (removal) and Law 14,451/2022 (appointment of non-partner managers and amendment of the articles, which now require more than half of the capital instead of 3/4). This is an important point of currency: many older charters still repeat quorums the law has since relaxed. If your articles of association predate 2022, a review is worthwhile.

What are the three ways to organize management?

The articles may organize management in three basic ways: sole management (a single manager), joint management (decisions as a block) or management by area (each partner runs their own front). There is no “best” model in the abstract — only the one best suited to the partnership’s profile.

1. Sole management (a single manager)

One partner — or a professional manager — concentrates the management powers and may sign alone for the company.

Works well when: there is one clearly operational partner while the others are pure investors, or in companies with a de facto single person in charge.

Risk: total concentration. The other partners depend entirely on the conduct of a single person.

Sample wording: “The company shall be managed by [NAME], partner, who shall hold, individually and severally, all powers of management and representation, and may perform all acts necessary for the regular operation of the company.”

2. Joint management (decisions as a block)

Two or more partners must sign jointly for an act to bind the company. Nobody decides alone.

Works well when: the partners hold balanced stakes and want mutual control, especially over financial decisions.

Risk: slowness. If everything requires joint signatures, daily operations grind to a halt — imagine needing two signatures to pay the electricity bill.

Sample wording: “The company shall be managed jointly by partners [NAME 1] and [NAME 2], and the signature of both shall be required for the validity of acts of management and representation before third parties.”

3. Management by area (responsibilities segregated by partner)

Here lies the heart of the question in this article’s title. Instead of treating “management” as a single block, the articles divide responsibilities by area, assigning each partner command of what they know best.

It is the structure most used by small and mid-sized companies with complementary partners: one runs sales, the other runs finance. Each decides and signs within their own sphere, and the most sensitive acts are reserved for joint decision.

Sample wording: “Management shall be exercised by the partners as follows: partner [NAME 1] shall be responsible for commercial and operational management, including entering into contracts with clients and suppliers up to the limit of R$ [AMOUNT] per act; partner [NAME 2] shall be responsible for financial and administrative management, including the operation of bank accounts and the relationship with financial institutions. Acts exceeding these powers shall require the joint signature of both.”

The smart solution is almost never a pure “everything joint” or “everything solo.” This logic of segregation is the starting point both for the clauses that limit and for the clauses that expand each partner’s authority.

Which clauses limit each partner’s authority?

Limiting clauses are containment clauses: they exist so that nobody goes beyond what was agreed. They work as “brakes” and protect the assets of the company and of the partners themselves. The main ones are four:

a) Monetary caps. Each manager may contract alone up to a ceiling; above it, joint signatures or partner approval is required.

“Acts involving obligations exceeding R$ [AMOUNT] shall require the signature of both managers.”

b) Acts requiring joint signatures. Regardless of amount, certain acts only bind the company with two (or more) signatures — typically bank account transactions, taking out loans and issuing negotiable instruments.

c) Prohibited acts, or acts requiring partner approval. Some decisions fall outside ordinary management and call for a collective resolution. It is prudent to list them expressly, for example:

1. sale or encumbrance of real estate;

2. granting personal guarantees (aval), surety (fiança) or other guarantees in favor of third parties;

3. taking out financing above a certain amount;

4. opening or closing branches;

5. admitting new partners or entering into long-term contracts.

“No manager may, without a resolution of the partners, grant aval, surety or any guarantee in the name of the company for the benefit of third parties, under penalty of personal liability.”

d) Limits set by the corporate purpose (the ultra vires doctrine). The law provides that acts clearly outside the company’s corporate purpose may not bind it (art. 1,015, sole paragraph, of the Civil Code). A well-drafted corporate-purpose clause already works as a natural limit on management powers.

The function of these clauses is simple to explain to a client: they ensure that no partner can single-handedly put at risk what belongs to everyone.

Which clauses expand what each partner can do?

Expanding clauses are enabling clauses: they make clear who may do what and prevent paralysis when life happens. If the previous ones contain, these ones release — in a controlled way. The most useful are five:

a) Assigning specific areas to each partner. This is the practical translation of segregated management: the articles formally name the partner responsible for each front (sales, finance, operations, legal, HR), with the power to decide and sign within it. This delivers autonomy with accountability and eliminates guesswork about who is in charge of what.

b) Appointing a non-partner manager (a professional executive). The limitada allows the appointment of a manager who is not a partner — useful when the business professionalizes its management and hires an executive. As we saw, this now requires more than half of the capital, once the capital is fully paid in (art. 1,061, as amended by Law 14,451/2022).

c) Substitution powers in case of absence or incapacity. One of the most useful and most forgotten clauses. It provides that if one partner steps away (travel, illness, leave), the other temporarily assumes their responsibilities — preventing the company from being left without anyone who can sign.

“In the event of the temporary absence or incapacity of one of the managers, the other shall be vested with the powers necessary to perform the management acts of the affected area for the duration of the impediment.”

d) Delegation of specific powers. The articles may authorize the manager to grant powers of attorney with defined powers for specific tasks (representation before public bodies, acts before the tax authorities, administrative defenses), with a set term and scope.

e) Special powers by subject matter. It is possible to expand one partner’s authority in specific situations — for example, giving the finance partner sole power to negotiate tax installment plans, or the operations partner sole power to hire and dismiss up to a certain level of seniority.

The principle here is the opposite of limitation, but complementary to it: give each partner the power to do their job without depending on the other all the time.

How does the management clause work in practice?

A management clause only fulfils its role when it produces effects in the real world — being on paper is not enough. Three points deserve attention:

1. Registration with the Board of Trade = enforceability against third parties. The division of powers only binds banks, notaries and suppliers after it is registered with the Board of Trade (in São Paulo, the JUCESP). It is the registered charter that the bank consults to know who can operate the account, and that the notary requires to register the sale of a property. A handshake agreement binds no one on the outside.

2. Personal liability of managers. Whoever manages is answerable for their acts. A manager who acts negligently, exceeds their powers or acts against the articles may be held personally liable for the losses (art. 1,016 of the Civil Code). Delimiting responsibilities is therefore not mere bureaucracy: it is what protects a partner from being held liable for decisions that were not theirs.

3. Excess of powers and good-faith third parties. Watch out for a practical risk: if a partner signs something outside their authority but the third party acted in good faith and the act falls within the company’s corporate purpose, the company may end up bound anyway — and be left to seek recovery from the partner who overstepped. So limiting on paper matters, but communicating the limits to banks and business partners (and registering everything) is what truly closes the door.

A practical example: the clause at Tech Move Ltda.

Picture Tech Move Ltda., with two equal partners: Bruno, who excels at sales and client relationships, and Carla, who runs finance and administration. A well-designed management clause for them would say, in short:

• Bruno manages the commercial and operational area and may close contracts with clients and suppliers up to R$ 50,000 per act (a clause that grants authority, but with a cap that limits it).

• Carla manages the financial area, with sole authority over routine banking up to R$ 30,000.

• Above those limits — and for loans, guarantees, asset sales and the admission of new partners — joint signatures are required (limitation).

• If one is absent, the other temporarily takes over their area (expansion for a specific scenario).

• Both are prohibited from granting aval or surety in the company’s name without a joint resolution (a hard limit).

The result: agility in the day-to-day, control over sensitive decisions, autonomy for each partner to shine in their own area — and a document that, registered with the JUCESP, gives security to banks, business partners and the partners themselves.

The most common (and costly) mistakes

• Silent or generic articles (“management by both partners,” without saying how). This reopens the door to the legal default of broad, individual powers (art. 1,013).

• Requiring joint signatures for everything. It paralyzes the operation and pushes the company into informality — the partners start working around their own charter.

• Not planning for a partner’s absence. The company becomes hostage to an unavailable signature.

• Repeating outdated quorums that the law has since reduced (leftovers from pre-2019/2022 templates).

• Not registering changes with the Board of Trade. The agreement becomes a dead letter before third parties.

• Confusing the articles of association with the partners’ agreement. Sensitive, confidential matters (veto rights over strategic decisions, exit rules, valuation of quotas) usually live better in the partners’ agreement (acordo de sócios), an instrument that complements the articles without exposing those terms to public registration.

Checklist: what a good management clause must answer

Before signing, the articles need to make clear:

• Who the managers are and how they were appointed (in the articles or in a separate instrument).

• Which areas each partner commands.

• What each one may sign alone — and up to what amount.

• Which acts require joint signatures or a resolution of the partners.

• What is expressly prohibited (aval, surety, guarantees, asset sales).

• What happens when a manager is absent.

• How — and by what quorum — a manager is appointed and removed.

• How all of this connects to a partners’ agreement, if there is one.

Frequently asked questions about the management clause

Can a partner sign a contract alone on behalf of the company?

Yes — if the articles of association do not say otherwise. When the articles are silent, the law presumes that each partner manages separately and may sign alone for the company (art. 1,013 of the Brazilian Civil Code). That is exactly why the management clause exists: to limit who signs what, set monetary caps and require joint signatures for sensitive acts. Without it, authority is broad and individual.

What happens if the articles of association have no management clause?

Without a management clause, the legal default applies: management belongs separately to each partner, who may decide and sign alone (art. 1,013 of the Civil Code). In practice, any partner can contract, buy and bind the company without consulting the others. It is the gateway to a large share of partnership disputes — and the reason why designing the clause from the start prevents losses.

Where — and by what quorum — is the management clause amended in São Paulo?

In São Paulo, amendments to the articles of association are registered with the JUCESP (the São Paulo State Board of Trade). Since Law 14,451/2022, amending the articles — including the management clause — requires the approval of partners representing more than half of the capital, no longer 3/4 as before. The change only becomes enforceable against third parties after registration with the Board of Trade.

Do I need a lawyer to amend the management clause?

For micro and small companies (ME and EPP), filing the amendment with the Board of Trade does not require a lawyer’s endorsement (Supplementary Law 123/2006, art. 9, §2). For other companies, charters and their amendments may, as a rule, only be registered with a lawyer’s endorsement (Law 8,906/1994, art. 1, §2). Mandatory or not, it is in the drafting of the clause — caps, areas, prohibitions — that a lawyer prevents the future dispute.

What is the difference between the management clause and the partners’ agreement?

The management clause sits inside the articles of association, is registered with the Board of Trade and organizes who signs for and manages the company. The partners’ agreement is a separate document, as a rule not filed publicly, where the most sensitive arrangements live: veto rights over strategic decisions, exit rules, rights of first refusal over quotas and valuation of stakes. One complements the other; together, they give the partnership structure and protection.

The right structure on paper prevents the dispute in practice

Most fights between partners are not born of bad faith — they are born of expectations never agreed in writing. Who was allowed to decide what? Why did he sign that alone? Who takes over now?

A well-built management clause turns those doubts into clear rules before they become litigation. It is, at once, the instrument that gives the business agility and gives those who run it security — and tailoring that structure to each company’s reality is the work of someone who knows both corporate law and the routine of running a business.

At Falchet e Marques Sociedade de Advogados, a law firm in São Paulo (Av. Paulista), we structure articles of association and partners’ agreements tailored to your business model — balancing autonomy, control and asset protection. If your company has more than one partner, it is worth reviewing whether what is written reflects how you actually want to decide.

Talk to our team on WhatsApp: +55 11 95901-1854 — and organize your company’s management before it becomes a problem.