Trusts, Resolutions and the Authority Problem: A Legal View

Almost every real-asset transaction eventually runs into the same question: can the person sitting across the table actually bind the entity they claim to represent? It sounds like a formality. Legally, it's anything but, and the rules differ meaningfully depending on the structure involved.

For a company, authority typically flows from a board resolution, passed with whatever quorum and approval threshold the company's Memorandum of Incorporation requires, authorising a named individual to sign and to bind the company in relation to a specific transaction or category of transaction. A director acting outside a properly authorised mandate doesn't necessarily bind the company at all — and where multiple directors or shareholders are involved, the absence of a clean, minuted resolution is a real gap, not a paperwork nicety.

Trusts are a different, and frequently misunderstood, category. South African trust law generally requires trustees to act jointly, unless the trust deed expressly provides otherwise — meaning a single trustee, however senior or however long they've represented the trust informally, typically cannot bind it alone. I have seen transactions proceed for months on the assumption that one trustee's word was sufficient, only to stall badly when it emerged that the trust deed required unanimous trustee consent that had never actually been obtained.

Partnerships raise a similar issue: absent a partnership agreement that says otherwise, binding the partnership generally requires the authority of all partners, not just the one doing the talking. Community trusts and cooperative structures, increasingly common in agri-energy and impact-driven real-asset projects, often layer additional complexity — beneficiary consent processes, community governance structures, or statutory requirements specific to the entity type.

None of this is exotic law. It is well-established, and it is entirely checkable — provided someone actually asks for the constitutive documents and the relevant resolution, and reads them, rather than accepting a confident verbal assurance. Doing that check early, before time and money are committed to the rest of a transaction, is one of the cheapest forms of risk management available in real-asset deal-making — and one of the most frequently skipped.