Perspectives · Payments and settlement
What a bank mandate is, and why signatories go out of date
A bank mandate is the instruction a company gives its bank about who may operate its account and on what terms: who can sign, who can approve payments, and whether one or two people are needed. It is set by the board and held by the bank, and it is one of the records most likely to fall behind the company's real position. This perspective is general information, not legal advice.
Week 41, published 10 November 2026 · Payments and settlement
The definition
The company's instruction to its bank
When a company opens an account, the board resolves to do so and tells the bank who is authorised to act. The mandate usually lists named signatories, sets signing rules such as any one or any two together, and sometimes sets limits above which more approvals are needed.
The bank acts on the mandate it holds. If the mandate is out of date, the bank will still act on it.
The authority
Where the signatories' authority comes from
Section 40 of the Companies Act 2006 provides that, in favour of a person dealing with the company in good faith, the directors' power to bind the company, or to authorise others to do so, is deemed free of any limitation under the constitution. The board's authority to appoint signatories is what the mandate records.
That is also why the mandate is a governance record and not only a banking form. A signatory acts for the company because the board said so, and the board needs to be able to show when it said so and who it named.
The drift
Two records, two clocks
GOV.UK says Companies House must be told within 14 days of a change to a company's directors. There is no equivalent public clock for the bank mandate. A director who resigns is removed from the Companies House register within weeks, but can stay on the mandate until someone sends the bank a new one.
The same happens in reverse. A new finance director is appointed, but cannot approve payments because nobody updated the mandate. In a group with many entities and several banks, the gap between the board's position and each bank's records is easy to lose sight of.
The practice
Keep the mandate beside the officers
The simplest control is to treat every change of officer as a prompt to check each mandate the person is on. When someone leaves, every account where they are a signatory should be found and updated. When someone joins, the board resolution naming them should be filed with the mandate it changes.
A periodic review date for each mandate catches what the event based check misses, such as a bank that never processed an update.
In Alethia
Mandates, signatories and review dates
Alethia records each entity's bank accounts and mandates, with the authorised signatories and a mandate review date. The banking register shows which mandates are due for review, and the signatory list can be exported as a PDF.
Questions
Bank mandates, answered
Who decides who is on a company's bank mandate?
The board, usually by resolution, under the authority the directors hold to bind the company or authorise others to do so. The bank then acts on the mandate it holds.
Does telling Companies House that a director has left update the bank?
No. The Companies House register and the bank's mandate are separate records. The bank needs its own instruction.
How often should a mandate be reviewed?
There is no single legal period. Many firms review whenever an officer changes and also on a set date each year, so that an update the bank never processed is caught.
See every mandate a leaver is on
Keep mandates and signatories beside each entity's officers, so a change on the board leads straight to the accounts it affects.