VLP Legal Press # 26
Who Can Sign a Contract for a Company in Cambodia?
Q1: Who is allowed to sign a contract for a company in Cambodia?
Can a director, manager, shareholder, or employee sign?
The Law on Commercial Enterprises 2005 (“LCE”) and Law on Amendment to the Law on Commercial Enterprise 2022 (“Amended LCE”) do not provide a clear-cut provision stating who has the right to sign contracts for a company.
How is such “right” granted to the signatory?
Based on the Amended LCE and the LCE, the authority to sign may be arise in two ways:
⚖️ Authority granted by the law
Several articles of the Amended LCE have indirectly provided that a director, a manager and a company secretary have the authority to sign a contract.
Based on Article 115 (new), a letter or contract made on behalf of the company by a director, a manager or a company secretary is valid even if no company stamp is attached to the documents.
According to Article 106 (new), a company or a person who has guaranteed an obligation of that company cannot refuse to perform its obligations toward a third party by arguing that “the person who is the director, employee or company secretary is not appointed or authorized to perform duties which are customary business of the company or documents issued by a director, manager or company secretary are invalid”, unless such third party knew or should have known about these issues.
Although the rights are not expressly granted, from these Articles, in principle, a director, manager, and company secretary are recognized by law as having authority to act and sign on behalf of the company, especially for matters within the company’s ordinary business.
How about a shareholder? Can a shareholder sign a contract for a company?
Shareholders do not automatically have the right to sign contracts on behalf of the company merely because they hold shares. They must also hold a management position or be properly authorized (i.e., authority granted by the company as discussed below).
🏛️ Authority granted by the company
Authority may also be granted internally by the company.
Article 119 of the LCE empowers the directors to appoint an officer of the company and determine the specific rights for such officer.
This means that an employee or other representative may sign contracts if they are properly authorized by the director(s). This authority can be granted through a resolution of the board of directors, a written power of attorney or an internal appointment document specifying their authority.
Simple summary
In Cambodia, a contract may generally be signed by:
a director,
a manager,
a company secretary; or
an employee or representative who has been properly authorized.
In practice, we note that the signing authority in smaller scale companies is often held by the director or managing director. Whereas, in larger companies or multi-national companies, signing authority for operational contracts are delegated to managers or specific officers for operational efficiency and directors retain the right to sign for contracts of higher value.
Q2: What is a company resolution?
Do we need one for every contract?
A company resolution is a formal decision made by the company. Under the LCE, decisions of a company are generally made either by:
Shareholders through a shareholder’s resolution
This is typically required for matters relating to the company’s structure, ownership, or shares, such as:
amendment of memorandum and articles of association
change of company’s name
increase or decrease of share capital
merger, dissolution, or sale of substantially all assets
appointment or removal of directors
Directors through a board resolution
The board is responsible for managing the business and affairs of the company. Board resolutions are commonly used for matters such as:
entry into significant contracts
borrowing or granting security
opening bank accounts
appointment of authorized signatories
appointment of officers or representatives
approval of major commercial transactions outside ordinary course of business
Although a company resolution serves as formal evidence that the required majority has approved a particular matter, it is not necessary for every contract.
In practice, for ordinary business transactions entered into within the normal course of business (such as routine supply agreements, services contracts within operational scope, day-to-day commercial transaction, etc.) and within the existing authority of the director or management, a separate resolution is generally not required.
However, a resolution is even required when:
the law requires it;
the company’s articles require it; or
the nature or size of the transaction justifies discussion over a meeting and obtaining the consent of the directors/shareholders.
In short, resolutions are less about contract validity and more about proper corporate governance and risk management.
Q3: Is a company stamp required for a contract to be valid and effective in Cambodia?
Is a contract still valid if it is signed but not stamped?
Based on Article 115 (new) of the Amended LCE, a letter or contract made on behalf of the company by a director, a manager or a company secretary is valid even if no company seal/stamp is attached to the documents.
This provision clearly confirms that a company stamp is not a legal requirement for the validity of a document signed by these officers.
However, the law does not expressly clarify whether the same principle applies to a contract or letter signed by another representative who has been duly authorized by the company (for example, an employee appointed through a board resolution or power of attorney).
Nevertheless, from a conservative and risk-management perspective, where a contract is signed by an authorized representative (who is not a director, manager, or company secretary), it is advisable that the appointment document or board resolution clearly specify:
whether the representative may sign without a company seal; or
whether the stamp must be affixed to documents signed by that representative.
This reduces ambiguity and potential disputes.
In practice, certain documents submitted to government authorities are still required to bear the company stamp. These typically include application forms, company resolutions, and other official filings. In such cases, the requirement arises from administrative practice rather than under the law.
Q4: Is a company stamp alone enough?
If we only affix the company stamp without a signature, is the contract valid and effective?
As having mentioned above, the company stamp itself does not create authority.
Unlike other jurisdiction, the Cambodian law does not expressly mention how contracts should be signed to be valid and effective.
In this case, we need to refer to the general rules on contract formation under the Civil Code.
Article 336 of the Civil Code provides that:
“(1) A contract shall come into effect once an offer and the acceptance thereto conform to each other.”
Article 343 of the Civil Code provides further that: “ In the event that a notice of acceptance is not required as a manifest intention of the offeror or under applicable trade customs, the contract shall be formed once the act that is recognized as an acceptance has been performed.”
Based on these Articles, the general principle is clear that a contract is formed upon mutual consent (offer and acceptance).
However, affixing a company stamp alone, without any signature or evidence of authorization, will raise questions about whether the company has actually expressed its intention to be bound.
A stamp by itself does not identify:
who acted on behalf of the company;
whether that person had authority; or
whether the company accepted the terms.
Therefore, in practice, a company stamp alone may not be a strong enough evidence of a valid and binding contract, unless it can be supported by other evidence showing the company’s clear intention and authorization (for example, performance of the contract, board resolution, or surrounding circumstances).
This analysis applies to contracts that are not expressly required by law or administrative regulations to be in writing or notarized. In practice, such contracts expressly required to be made in writing must be at least signed by the authorized representative of the company.
This is for general reference only and does not constitute legal advice. For further guidance, contact us at:📧 connect@vlplaw.co