IRS Form W-9, Request for Taxpayer Identification Number and Certification, is a federal tax form allowing employers to report payments for services to the federal government.
When an individual, an independent contractor, or another business entity requests a paying business’s Taxpayer Identification Number (TIN), the business must provide them with a completed W-9.
If you manage a corporation, the individuals who can fill out a Form W-9 and sign it on behalf of the corporation have signing authority. Learn about corporate signatory authority and which individuals have it.
Corporation Signatory 101: The Basics
Each corporation typically has at least one individual with signing authority. Here’s what signatory authority means, how a corporation establishes that authority, and the consequences of allowing an unauthorized person to sign corporate documents.
Who is a Signing Authority in a Corporation?
The signing authority in a corporation, also known as a signatory, is an individual authorized by that corporation’s management to sign legal documents on their behalf. In many instances, specific roles within a corporation are only authorized to sign particular types of documents.
For example, a treasurer typically has the signing authority for financial documents but not for administrative documents or strategic contracts.
How Signing Authority is Typically Established in Corporations
A corporation typically defines its signing authorities in its bylaws, alongside its corporate structure and the list of powers and duties defined for each officer and director position. The board of directors can also pass resolutions to delegate their signatory duties to other positions and individuals.
Signing authority can also be granted through corporate processes and procedures. These processes allow specific individuals to become signatories, provided they meet specific requirements or obtain approval from select organization members.
In particular cases, corporate executives can also give signing authority to an individual by granting them power of attorney or through external contracts and arrangements. For example, when hiring a lawyer external to the organization, a corporation may grant them signing authority on specific forms and documents.
Doing so can give the lawyer more flexibility, reducing the need for consultations and letting them act autonomously on behalf of the corporation.
Consequences of Having the Wrong Person Sign
Allowing a corporate member without signing authority to sign tax forms can lead to various potential consequences. They include the following:
- Documents signed may lack legal validity, meaning they are considered invalid, unenforceable, or voidable.
- Letting an unauthorized person sign a document may be considered misrepresentation, potentially exposing the corporation to litigation for fraud.
- Individuals signing corporate documents without signatory authority may be internally perceived as a breach of authority. It can create internal conflicts, damage trust, and expose the corporation to contractual obligations it did not intend to approve or authorize.
Who Can Sign a W-9 for a Corporation
Corporate members with signing authority must also comply with federal laws, regardless of their position within the organization. According to Part II of Form W-9 and the instructions on Page 2, in addition to having the corporation’s consent, the signatory must be a U.S. person for federal tax purposes, such as:
- A U.S. citizen
- A lawful permanent resident (Green Card holder)
- A partnership, corporation, company, or association based in the United States or subject to U.S. law
- A U.S. estate
- A U.S. trust, also known as a domestic trust
Three broad categories of individuals within a corporation’s structure typically have the authority to sign an IRS Form W-9: board members, authorized officers, and appointed representatives. In special cases, some organizations may give signatory authority to individuals that don’t fall within these categories.
If you need help filling out a W-9, check out our complete Form W-9 guide for more information.
Board Members – The Big Shots
Board members who possess signing authority can include:
- Chief Executive Officer (CEO)
- Vice President
- Treasurer or Chief Financial Officer (CFO)
- Company Secretary
Authorized Officers – The Go-to Signatories
A corporation’s go-to signatories may include the following positions:
- Chief Operating Officer (COO)
- Chief Legal Officer (CLO)
- Chief Compliance Officer (CCO)
Appointed Representatives – Agents with a Special Task
Corporations can, either through their bylaws, a decision from the board of directors, or other internal processes, appoint specific representatives with signing authority. They include the following roles:
An authorized agent is an individual within a corporation with signatory authority and is neither an officer nor a board member. Authorized agents typically have specific, defined tasks, which can include signing authority for tax forms such as IRS Form W-9.
External Legal Counsel
Corporations may engage external legal counsel, such as attorneys or specialized law firms, to protect their legal interests. Depending on the scope and level of engagement, the corporation may grant them signatory authority, allowing them to sign documents and tax forms like the W-9.
Individuals with Power of Attorney
Corporations can also grant power of attorney to individuals, either internal to the organization or external. An individual with power of attorney for a corporation may also possess signing authority on tax forms such as the W-9.
Exceptions and Special Cases – When the Rules Bend
In special cases, a corporation may grant signatory authority for signing tax forms, including IRS Form W-9, to the following:
Tax Experts and External Accountants
Some corporations may hire external tax experts, such as advisors, consultants, or tax firms. The roles and responsibilities of external tax experts typically include tax planning and compliance. Corporations may grant signing authority on the organization’s tax forms demonstrating their accuracy.
Large corporations, such as organizations with vast resources and multiple divisions and departments, may sometimes delegate signing authority to lower-level managers and team leaders. This prevents delaying paperwork or tying up the organization’s primary signatories.
Here are the answers to some common questions about signing authority for a corporate W-9.
A corporation’s accountants do not have the authority to sign tax forms such as the W-9 on behalf of the organization, but a corporation may designate them as an authorized agent, giving them signing authority.
A corporation’s in-house lawyer can be designated as a signatory on tax forms like the W-9, but they must have received signatory authority from a specific rule, such as the corporation’s bylaws, a board decision, a designation, or another internal process.
If an unauthorized individual signs a Form W-9, the corporation may face legal and financial consequences, including invalid tax reporting, breach of authority, and an increased risk of fraud.
No, a freelancer generally doesn’t have the authority to sign a W-9 on behalf of a corporation. Only individuals with signatory authority within the corporation can legally sign such forms.
If a Form W-9 isn’t signed by a member of the corporation or another authorized individual, it may result in invalid tax forms and complications during the corporation’s tax reporting.
No, a corporation’s Form W-9s do not need to be notarized. It only requires the signature of a U.S. person with signing authority on behalf of the corporation.