Can this be signed electronically?

Yes. Electronic signatures are generally enforceable under the ESIGN Act (15 U.S.C. §7001) and UETA where adopted. Confirm exceptions (wills, certain court filings) do not apply to your contract.

Do I need a notary or witnesses?

Most business directing agreements do not require witnesses, but some states or third parties (banks, registries) may ask for notarization. For real estate transfers or powers of attorney, state-specific notarization and witness rules may apply.

How do I prove who signed?

Keep the signed PDF and its audit trail showing signer email, timestamp, IP address, and any authentication steps. For high-assurance needs, use multi-factor authentication or certificate-based signatures.

What if a signer lacks authority?

Actions taken by an unauthorized signer can be voidable. Require corporate authorization evidence (board resolution or meeting minutes) when a company appoints a signer.

How long should I keep the signed contract?

Retain records for at least three years after termination for tax and dispute purposes; longer retention may apply for HIPAA (6 years) or industry rules.

Can I amend the contract later?

Yes. Use a written amendment signed by the same authorized parties. Record the amendment date, retain it with the original contract, and notify affected third parties.

Electronic Signature
Templates
Miscellaneous
Business Directing Contract

Business Directing Contract

This template is fully customizable. Edit the text, fill out the fields, and send it for signature. Give it a try!

BUSINESS DIRECTING CONTRACT

This Business Directing Contract ("Agreement") is entered into as of Effective Date: by and between:

Client Name: Client Address:

Director Name: Director Address:

RECITALS

WHEREAS, Client operates a business and requires professional direction and oversight for certain business initiatives, projects, and strategic activities (the "Services"); and

WHEREAS, Director represents that Director has the experience, capacity, and authority to provide the Services described herein and is willing to perform such Services under the terms of this Agreement; and

WHEREAS, the parties desire to set forth the terms and conditions under which Director will provide the Services to Client.

SCOPE OF WORK

Director shall provide business directing and oversight services including, but not limited to, strategic planning, project supervision, staffing recommendations, operational directives, and performance monitoring. Specific deliverables, milestones and acceptance criteria are to be described below or attached as appendices.

Detailed Scope of Work

PAYMENT TERMS

As full compensation for the Services rendered under this Agreement, Client shall pay Director the amounts and in the manner described below. All fees are exclusive of taxes unless otherwise stated.

Compensation Amount Payment Schedule and Invoicing Invoice Due Days Late Fee

If Client fails to make any payment within the period stated above, Client shall pay interest on the overdue amount at the rate of and an administrative late fee of . Interest shall accrue from the due date until payment is made in full.

All payments shall be made in United States dollars unless otherwise agreed in writing. Unless expressly set forth, Director is responsible for all taxes associated with Director's compensation.

TERM AND TERMINATION

This Agreement shall commence on Start Date: and shall continue until End Date: unless earlier terminated in accordance with this Section.

Either party may terminate this Agreement for convenience upon written notice to the other party delivered at least days prior to the intended termination date. Either party may terminate this Agreement immediately for material breach by the other party that remains uncured for thirty (30) days following written notice of such breach or immediately for actions constituting fraud, willful misconduct, or gross negligence.

Upon termination, Director shall deliver all work in progress and invoices for Services performed up to the effective date of termination. Client shall pay for all undisputed Services rendered through the termination date within the invoice due period specified above.

CONFIDENTIALITY

For purposes of this Agreement, "Confidential Information" means all non-public, proprietary or confidential information disclosed by either party to the other, whether disclosed orally, in writing, or by inspection, including financial data, business plans, customer lists, trade secrets, and intellectual property.

Director and Client each agree: (a) to hold Confidential Information in strict confidence and not to disclose it to any third party except as necessary to perform the Services and subject to comparable confidentiality obligations; (b) to use Confidential Information solely for the purposes of performing obligations under this Agreement; and (c) to take reasonable measures to prevent unauthorized access or disclosure. Confidential Information does not include information that is or becomes publicly available through no wrongful act of the receiving party, or that is rightfully received from a third party without breach of an obligation of confidentiality, or that is independently developed without use of Confidential Information.

The parties acknowledge that breach of this confidentiality provision may cause irreparable harm for which monetary damages would be an inadequate remedy; accordingly, the non-breaching party shall be entitled to equitable relief, including injunctive relief, in addition to any other remedies available at law or equity.

GOVERNING LAW

This Agreement shall be governed by and construed in accordance with the laws of the State of without regard to its conflicts of law principles. The parties submit to the exclusive jurisdiction of the state and federal courts located in that state for any dispute arising out of or relating to this Agreement.

ENTIRE AGREEMENT

This Agreement, together with any exhibits or attachments expressly incorporated herein, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, proposals, negotiations, and communications, whether written or oral. No amendment or modification of this Agreement shall be effective unless in writing and signed by authorized representatives of both parties.

MISCELLANEOUS

Relationship of the Parties: Director is an independent contractor and not an employee, agent, joint venturer, or partner of Client. Director shall be responsible for all employment taxes and withholdings for Director's personnel, if any.

Assignment: Neither party may assign or delegate its rights or obligations under this Agreement without the prior written consent of the other party, provided that Client may assign this Agreement to an affiliate or a successor in interest in connection with a merger or sale of substantially all of Client's assets without such consent.

Notices - Client Contact Notices - Director Contact

Client:

By:

Date:

Director:

By:

Date:

What the Business Directing Contract Is and When It's Used

A Business Directing Contract is a written agreement that grants a person or entity authority to direct specific business activities, operations, or decisions on behalf of a business. Typical provisions define scope of authority, decision-making limits, term and termination, compensation, reporting obligations, confidentiality, and dispute resolution. When executed correctly it clarifies who may act for the business, reduces operational ambiguity, and documents responsibilities for regulators, banks, and counterparties. Electronic execution is generally enforceable under federal and state e-signature laws such as the ESIGN Act (15 U.S.C. §7001) and state UETA statutes, subject to statutory exceptions.

Why a Clear Directing Agreement Matters

A precise Business Directing Contract establishes legal authority, allocates risk, and creates an auditable record of delegation. It supports operational continuity, helps satisfy bank and vendor due diligence, and strengthens defenses against claims of unauthorized acts when signed and retained according to ESIGN/UETA requirements.

Who Typically Uses a Business Directing Contract

Organizations use directing agreements to clarify decision-making authority and document delegation across internal and external stakeholders.

Small business owners delegating day-to-day management to an appointed director or manager, with limited authority and reporting obligations.
Boards of directors setting temporary operational authority during leadership transitions or when appointing an interim executive.
Family-owned businesses formalizing delegation to family members or third-party managers to limit future disputes.

Selecting the right signatory profile and recording authority limits helps prevent later disputes and supports regulatory or banking verification needs.

Common Signatory Profiles

Executive Director

A senior employee or appointee authorized to make routine operational and contractual decisions within defined limits; typically required to provide regular reporting to the board and to act as a fiduciary for specified matters, documented in the agreement.

Outside Manager

An external manager or management company granted specific, contractually limited authority (for example, vendor selection or hiring) often used for professional management while preserving certain reserved powers for owners or the board.

Essential Elements to Include in the Contract

A complete Business Directing Contract organizes authority, responsibilities, timeframes, and protections so parties and third parties can rely on it.

Scope of Authority

Describe precise powers granted (financial thresholds, hiring, contracting) and expressly list any excluded authorities to avoid ambiguity and unintended delegation.

Term & Termination

State effective date, duration, renewal mechanics, and termination triggers including notice periods and immediate termination for cause.

Compensation

Specify fees, reimbursement rules, expense caps, payment timing, tax reporting responsibilities, and whether payments trigger 1099 reporting.

Reporting & Records

Require periodic written reports, access to books, and retention standards for records supporting decisions and expenditures.

Confidentiality

Define confidential information, permitted disclosures, post-termination obligations, and remedies for unauthorized disclosures.

Governing Law & Disputes

Designate governing state law, include forum selection or arbitration clauses, and specify how notices and service will be delivered.

Step-by-Step: Completing and Executing the Contract

Follow a clear sequence to reduce errors and establish a robust record for third parties and regulators.

01

Draft the Terms: Define limits, duties, and duration in plain, specific language.
02

Review Legally: Have counsel review fiduciary language and tax consequences before finalizing.
03

Obtain Signatures: Collect signatures from all authorized signatories with date and capacity noted.
04

Record and Distribute: Provide copies to banks, insurers, and key vendors; record amendments promptly.

How to Set Up a Digital Signing Workflow

Configure a signing workflow that enforces order, authenticates signers, and preserves an audit trail for future reliance.

Field	Configuration
Signature Type	Electronic signature \| visible name + audit trail
Authentication Level	Email verification, SMS code, or advanced ID proofing
Routing Order	Sequential or parallel signer steps per designated roles
Retention Setting	Export signed PDF and maintain audit log per retention policy

End-to-End Process for an Enforceable Electronic Execution

A predictable flow helps prove intent, consent, and attribution when relying on electronic signatures under ESIGN/UETA.

Prepare Document: Insert fields and metadata before sending.
Authenticate Signers: Use at least email verification; add SMS or KBA for higher assurance.
Execute: Signers review and apply signatures with timestamps recorded.
Archive: Store signed PDF and audit trail to support future reproduction.

Platform and File Requirements for eSigning

Ensure your platform supports secure storage, audit trails, and the file formats your counterparty requires.

File Formats: Use PDF or DOCX; PDF preserves layout and is preferred for signatures.
Authentication: Platforms should offer email, SMS code, and higher-assurance ID proofing options.
Integrations: Look for compatibility with systems like Salesforce, NetSuite, or Google Workspace for workflow automation.

Retain the signed document and a tamper-evident audit trail. For regulated industries, confirm the platform supports necessary compliance features such as HIPAA BAA or 21 CFR Part 11 before use.

Penalties and Immediate Risks of an Incorrect Contract

Unauthorized Acts: Liability for acts outside listed authority

Tax Reporting Errors: Incorrect 1099/W-2 reporting and withholding

Contract Invalidity: Courts may void actions taken without proper authority

Fiduciary Breach: Damages and removal for failure to meet fiduciary duties

Backup Withholding: 24% withholding for missing/incorrect TINs

I-9 Noncompliance: Fines $281–$2,789 per violation for paperwork errors

Common Mistakes to Avoid When Preparing the Agreement

Vague authority descriptions that create implied powers or permit broad unilateral action not intended by owners.
Failing to identify whether the appointee acts as agent, employee, or independent contractor for tax and liability purposes.
Not addressing record access and reporting cadence, leaving counterparties unclear about oversight and accountability.
Executing signatures without confirming signer capacity, correct title, or proper notarization for third-party reliance.

Key Dates, Notice Periods, and Reporting Deadlines

Track effective dates, notice windows, and any tax or filing deadlines tied to compensation or corporate filings.

Effective Date:

Date authority begins; enter as MM/DD/YYYY and use for notice timing.

Notice Period:

Specify required notice for termination or amendment (e.g., 30 or 60 days).

Renewal Notice:

State automatic renewal terms and required advance notice to decline renewal.

Tax Reporting:

Compensation may trigger Form 1099-NEC or W-2 reporting by Jan 31 each year.

Filing with Agencies:

Amendments to formation documents may incur state filing timelines and fees.

Practical Tips for Accurate and Efficient Completion

Apply consistent drafting and execution practices to reduce disputes and speed downstream acceptance by banks and vendors.

Use Specific Language

Describe the scope of authority with monetary thresholds and clear exclusions so third parties can rely on the contract without ambiguity.

Confirm Signer Capacity

Record titles and capacities (for example, 'Manager, XYZ LLC') and require corporate authorization evidence when a company signs.

Preserve Audit Trails

Retain the signed PDF and an audit log showing signer attribution, timestamps, IP address, and any authentication steps used.

Standardize Templates

Use template clauses for recurring delegations, paired with a checklist for required attachments, notarizations, and filings to save time.

Real-World Examples of Using Directing Agreements

These concise case summaries show how directing contracts solve operational or compliance needs.

Martin Properties

A regional property manager needed remote execution of management agreements during closing cycles.

Management used digital signatures to finalize authority limits quickly.
The digital workflow preserved audit records and reduced turnaround time while ensuring documents met lender and escrow requirements.

BIS

A services firm appointed an outside operations manager to handle vendor contracts.

The firm required explicit monetary caps and reporting.
Formalizing the arrangement limited exposure, clarified payment mechanics, and allowed efficient vendor onboarding with documented delegation.

eSignature Pricing and Feature Comparison for Executing Business Directing Contracts

Compare basic pricing and key capabilities for common eSignature platforms. signNow is listed first per platform ordering conventions.

	signNow	DocuSign	Adobe Sign	PandaDoc	HelloSign
Starting Price	$8/user/mo	$15/user/mo	$14/user/mo	$19/user/mo	$15/user/mo
Free Trial	7-day free trial	Varies by offer	Varies by offer	Varies by offer	Varies by offer
Bulk Send	Yes	Yes	Yes	Yes	No
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	No	No
Envelope Cap	No envelope cap	100 envelopes/user/year	Varies by plan	Varies by plan	Varies by plan

Frequently Asked Questions and Troubleshooting

Answers to common questions about signing, validity, notarization, and storing Business Directing Contracts.

Need help? Contact support

Can this be signed electronically?
Yes. Electronic signatures are generally enforceable under the ESIGN Act (15 U.S.C. §7001) and UETA where adopted. Confirm exceptions (wills, certain court filings) do not apply to your contract.
Do I need a notary or witnesses?
Most business directing agreements do not require witnesses, but some states or third parties (banks, registries) may ask for notarization. For real estate transfers or powers of attorney, state-specific notarization and witness rules may apply.
How do I prove who signed?
Keep the signed PDF and its audit trail showing signer email, timestamp, IP address, and any authentication steps. For high-assurance needs, use multi-factor authentication or certificate-based signatures.
What if a signer lacks authority?
Actions taken by an unauthorized signer can be voidable. Require corporate authorization evidence (board resolution or meeting minutes) when a company appoints a signer.
How long should I keep the signed contract?
Retain records for at least three years after termination for tax and dispute purposes; longer retention may apply for HIPAA (6 years) or industry rules.
Can I amend the contract later?
Yes. Use a written amendment signed by the same authorized parties. Record the amendment date, retain it with the original contract, and notify affected third parties.

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