Who should sign a company's engagement letter

Q: How might this look for one family business?

Illustration only. Two spouses are the directors and shareholders of a trading company, and one of them chairs a local unincorporated charity. The firm issues: A company letter addressed to the company, signed by one director "for and on behalf of" the company after a short board minute approving the appointment. A personal letter to each spouse for their own returns, each signed personally. Because they are married and both shareholders, the firm notes that if their interests diverge, for example in a separation, it will reconsider acting for both. An independent examination letter for the charity, signed by two trustees under a trustee resolution made under section 333 of the Charities Act 2011, with the resolution kept on file.

For a company, one director signing on the company’s behalf is normally enough, ideally with board authority and a signature block that names the company as the client and shows the signer’s capacity. For an LLP a member signs, for a partnership a partner, and for a charity the trustees or those they have authorised. When the people signing are also personal clients, their own work needs its own letter, because the company and the individual are separate clients.

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Who is the client when the engagement is with a company?

The company is a separate legal person and is the client, even where one person owns and runs it. The engagement letter should be addressed to the company by its registered name and number, and signed by an individual on its behalf.

Section 43 of the Companies Act 2006 provides that, under the law of England and Wales or Northern Ireland, a contract may be made on behalf of a company by a person acting under its authority, express or implied. An engagement letter is an ordinary contract for services, so a single director with authority can sign it. Section 40 then protects a person dealing with the company in good faith: the power of the directors to bind the company, or authorise others to do so, is deemed free of any limitation under the company’s constitution.

Good practice is still to have a director sign who the board has authorised to appoint advisers, and to record the capacity in which they sign. The audit standard ISA (UK) 210 shows the pattern in its example letter, with acceptance “on behalf of” the company by a named person with their title. How to set out a company signature block so the director is not personally bound is covered in signing contracts as a director.

Does it matter which director signs?

Legally, usually not, but practically it can. Points to consider:

The director who deals with the accounts is the natural signatory, because the letter sets out responsibilities for records and information that they will carry out.
Where directors disagree, a letter signed by one director without the others’ knowledge invites a later argument about whether the firm was properly appointed. In that situation ask for a board minute or a second signature.
Where a director has a personal interest in the terms, for example because the letter also commits the company to pay for that director’s personal tax work, section 41 can matter. It makes a transaction voidable by the company where its validity depends on section 40 and a director of the company is a party to it.
Audits are different: ISA (UK) 210 paragraph 9 requires the terms to be agreed with management or those charged with governance, as appropriate, so the board or audit committee should approve the letter.

Section 43 applies in England and Wales and Northern Ireland. Scottish companies follow Scots law on the formalities of contracts, so firms with Scottish clients should check their own legal advice on signing.

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Who signs for an LLP?

Section 6 of the Limited Liability Partnerships Act 2000 makes every member the agent of the LLP. The LLP is not bound only where the member had no authority to act and the other party knows that, or does not know or believe the person to be a member. A member can therefore sign for the LLP.

Firms usually ask a designated member to sign because designated members carry the statutory filing duties that the engagement often supports. See LLP designated members. The letter should be addressed to the LLP, not to the members individually, unless personal work is also being agreed.

Who signs for a partnership?

Under section 5 of the Partnership Act 1890 every partner is an agent of the firm and of the other partners for the purpose of the partnership business, and acts done in the usual way of that business bind the firm. One partner can therefore usually sign for the partnership.

For tax work the natural signatory is the nominated partner. GOV.UK describes the nominated partner as responsible for managing the partnership’s tax returns and keeping business records, and section 12AA of the Taxes Management Act 1970 allows HMRC to require the partnership return from a person identified in its notice. Each partner’s own return is a separate engagement with that partner as an individual client; see partnership tax returns.

Who signs for a charity?

It depends on the charity’s legal structure. The Charity Commission’s guidance on charity structures (CC22a) explains that a charitable incorporated organisation and a charitable company are corporate bodies that can enter contracts in their own name, while an unincorporated association or trust cannot, and its trustees are personally liable for what it does.

Charitable company: a director, who is also a charity trustee, signs for the company. Section 42 of the Companies Act 2006 restricts the protection in section 40 for companies that are charities, so the firm should check that the signatory has authority under the articles or a trustee resolution.
CIO: a trustee signs for the CIO as a corporate body, again with authority from the trustee body.
Unincorporated charity: the contract is in substance with the charity trustees, defined in section 177 of the Charities Act 2011 as the persons having general control and management of the charity’s administration. Section 333 allows the trustees to give two or more of their number a general or limited authority to execute documents in the names and on behalf of all of them, by a written authority or a resolution at a trustees’ meeting.

What changes when the signatories are also clients?

In owner managed businesses the director who signs for the company often wants the firm to do personal tax work too. ICAEW’s helpsheet on liens treats Mr A’s personal tax work and the accounts of his owner managed company, Company B, as two separate clients. That has consequences:

Separate letters or clearly separate schedules, each naming the right client and signed in the right capacity: once for the company, once personally.
Separate fees and invoices. Paragraph 10 of ICAEW’s guidance on charging fees says that where the party paying the fee is not the party receiving the advice, the accountant should consider the relationship with both, and there may be tax consequences.
Conflicts. Under R310.4 of the ICAEW Code of Ethics a conflict must not compromise professional judgement. Code examples include advising two clients in the same matter who are in dispute, such as divorcing spouses. Where directors are also shareholders with different interests, R310.9 requires the firm to judge whether specific disclosure and explicit consent are needed.
Fees owed by one client cannot be recovered from the other. The lien helpsheet states it would be inappropriate to hold the company’s papers over the director’s unpaid personal fees. See accountants’ liens.

How might this look for one family business?

Illustration only. Two spouses are the directors and shareholders of a trading company, and one of them chairs a local unincorporated charity. The firm issues:

A company letter addressed to the company, signed by one director “for and on behalf of” the company after a short board minute approving the appointment.
A personal letter to each spouse for their own returns, each signed personally. Because they are married and both shareholders, the firm notes that if their interests diverge, for example in a separation, it will reconsider acting for both.
An independent examination letter for the charity, signed by two trustees under a trustee resolution made under section 333 of the Charities Act 2011, with the resolution kept on file.

What mistakes do firms make?

Addressing the letter to the director by name, so it is unclear whether the company or the individual is the client.
Covering company and personal work in one letter signed once, leaving no clear record of who agreed to what or who pays.
Accepting a signature from a charity trustee with no authority from the trustee body.
Not updating the signatory after a change of directors or members. Signing arrangements are one reason to review letters periodically; see do engagement letters need renewing.

For the contents of the letter itself, see engagement letters for accountants.

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Sources

Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 24 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.

Who should sign a company’s engagement letter