Two-signature clause with the BV: when is the company bound or not?

For many startups and scale-ups, it sounds logical: if a director has acted independently before, it will be fine this time too. Legally, this is a lot more formal. At the BV, not only what happens in daily practice is relevant, but especially what the law and the statutes say about who can bind the company externally.

This is particularly important in the case of a two-signature clause. Such a clause states that the BV is only validly represented if two authorized persons act together. In practice, this is intended as a guarantee: not one director alone, but joint representation. For tech companies with multiple founders, investors at the table or a growing management team, this is not a detail, but a rule with a direct impact on contracts, financing and commercial agreements.

Why this topic is so relevant for startups and scale-ups

At Startup-Recht, we regularly see that young companies only really start to feel their governance seriously as soon as something goes wrong. In the early stages, a startup often works informally. Founders agree among themselves who takes deals, who engages with suppliers and who signs documents. As long as everything is going well, that seems efficient. The problem only arises when an agreement is contested and the company or the other party suddenly goes back to the statutes.

Especially in fast-growing companies, daily practice can differ from the formal layout. A director comes out independently, contracts alone more often and no one makes a big deal about that. However, this does not automatically mean that the director is also independently authorized externally. Indeed, the core of the right of representation at the BV is that the formal regime remains leading, precisely to protect legal certainty in trade.

This is an important lesson for startups and scale-ups. Informal working arrangements can work well internally, but outwardly, they do not always provide the same legal certainty as the team thinks they have.

How a BV's representative authority basically works

The legal starting point is in article 2:240 of the Dutch Civil Code. The board represents the company. In addition, the law also grants representation powers to each individual director, unless the statutes provide otherwise. In doing so, the law therefore offers a main rule and space to deviate from it by statute.

This system was deliberately set up formally. In principle, third parties must be able to rely on a clear and recognisable representation regime. In every agreement, they do not have to find out what internal agreements directors have made with each other or whether all internal decision-making has been correct. That would make trade unworkable.

At the same time, the law makes an important distinction between internal and external restrictions. Not every agreement or condition that applies within the BV automatically works outward. That distinction is crucial, especially for companies that conclude many contracts in a short period of time.

Which restrictions have and do not have an external effect

Not every restriction on the freedom of action of directors is also enforceable against third parties. In principle, substantive restrictions, such as a maximum amount, or conditions such as prior approval from another body, only have internal effect. They can therefore be relevant to internal governance and possibly to liability or relationships, but not automatically to whether the BV is externally bound.

This is different with restrictions that the law explicitly allows as part of the representation structure. A statutory arrangement for joint representation, such as a two-signature clause, is the best-known example. If such a regulation is legally included in the statutes and is known in the prescribed manner, in particular via the trade register, it may, in principle, have external effect.

That formal distinction is not a legal detail. It determines whether a counterparty can say: “I knew that internal approval was still needed, but the BV is still bound”, or whether the BV can object: “according to the statutes, this director was not allowed to sign alone, so there was no valid external representation”.

What a two-signature clause means in practice

A two-signature clause is intended to prevent one director from independently binding the BV. The idea behind this is clear: certain companies want extra control over external actions, for example because the board consists of several people or because there is a need for a built-in check for important transactions.

For startups and scale-ups, this can be very logical. Think of companies with two founders, an operational director alongside a technical founder, or a governance structure where investors attach great importance to joint decision-making. Then a two-signature clause feels like a decent guarantee. But this guarantee only works well if daily practice does not structurally differ from it, or if everyone at least understands the legal effect of such a deviation.

The most important message is therefore simple: a two-signature clause is not just an internal process date. If it is anchored in the articles of association and is known, she can determine whether a contract binds the BV at all.

Can the BV invoke that clause if one director acts alone anyway?

In principle, yes. If the statutes prescribe joint representation and that limitation has been properly announced, then one director cannot act independently on behalf of the BV. In principle, if the director acts alone, the company will not be bound.

In principle, this remains the case even when directors have agreed otherwise internally. An internal agreement that everyone can act separately does not change the formal external regime. The same applies to the situation where the other party has become accustomed to the individual action of one director. In itself, this enduring practice is no reason to set aside the statutory regulation.

The case law shows exactly that line. The BV's right of representation is formal, objective and aimed at protecting legal certainty in trade. Internal agreements, actual routines and internal decision-making requirements are therefore not necessarily decisive for the company's external commitment.

Why the actual practice isn't completely irrelevant after all

The fact that the formal line is strict does not mean that practice never plays a role. In exceptional cases, the BV's appeal to a statutory restriction may be limited. This is particularly conceivable when the other party's trust stems not only from the actions of the director himself, but from the company's conduct or omissions.

Then don't think of a separate previous transaction or a one-off mistake. The bar is higher. These are concrete circumstances from which it follows that the company itself gave the impression that the director was allowed to act independently. Various examples include: having a director act structurally independently, issuing correspondence or contract documents in that director's name, or accepting and ratifying similar transactions without reservation without mentioning the statutory limitation.

Even then, the outcome is not automatic that the BV is bound. The scope for correction remains limited and, in the case law, links it to exceptional circumstances, where recourse to the formal restriction would be unacceptable by standards of fairness and fairness. That is definitely not a low threshold. According to the line discussed, the mere fact that a counterparty has done business with one director more often is not enough for this.

The real tension: formal legal certainty versus trust created

The legal core therefore lies in the tension between two interests. On the one hand, the law wants to offer a clear, predictable and familiar system. Third parties must be able to see who is authorized without always having to follow internal decisions, shareholders' agreements or informal working practices. On the other hand, it can feel unreasonable if a BV lets a director act independently for a long time and only invokes the statutes as soon as it suits it.

The law and case law show that this tension, in principle, dissolves in favor of formal legal certainty. Only in a small category of exceptional cases is there room to correct. This may not always be intuitive for entrepreneurs, but it is legally understandable: without that formal line, it would be unclear what internal agreements or actual habits third parties should always take into account.

For startups and scale-ups, this is a relevant reality check. A smooth work process and a legal structure of jurisdiction are not the same thing. Anyone who confuses the two runs the risk of discussing the validity of contracts exactly when the interests become great.

What founders, directors and legal teams should take into account

The first lesson is that statutes are not just for the shareholders' meeting or the data room. They can determine directly whether a signed agreement binds the BV. If it contains a joint representation arrangement, that is not something to deal with loosely in the operation.

The second lesson is that internal governance and external representation must be kept apart. An internal approval requirement, a board appointment or a division of work within the founding team can be very relevant internally, but does not automatically have external effects. Conversely, a limitation enshrined in the articles of association can actually have far-reaching external consequences.

The third lesson is that consistent behavior counts. In practice, a structural departure from the statutory representation regime does not immediately create formal authority, but increases the risk of discussion about trust and the limits of invoking the statutes. Especially for scale-ups with many commercial contracts, procurement processes or international counterparties, this is a point not to be wasted.

At Startup-Recht, we see that this topic often only becomes urgent in the event of conflict, exit or funding. That is why it is wise to look at it earlier. Not because every anomaly is immediately fatal, but because the lack of clarity about representation causes exactly the kind of legal noise that is of little use to young growth companies.

Conclusion

The main rule is strict: at the BV, the formal representation regime prevails. If the statutes contain a two-signature clause and that regulation is correctly known, the BV can in principle rely on it if one director nevertheless contracts independently. Internal agreements and actual habits don't just change that.

At the same time, the story is not entirely black and white. In exceptional situations, invoking that statutory restriction may be ineffective, in particular when the company itself has given confidence that individual representation was sufficient. But that exception remains limited and requires concrete, additional circumstances. The bar is high.

For founders, directors and legal teams, the practical takeaway is clear: don't just look at how people work within the company, but especially at how the power of representation is formally organized. Because that is where it is ultimately determined whether the BV is bound by a signature or not.

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