Startup Delegation of Authority Matrix India: Who Can Approve Spend, Sign Contracts and Move Money?
The right authority matrix makes fast decisions possible while keeping high-risk commitments, bank transfers and investor consent under control.
Direct answer
A startup delegation of authority matrix should say who can propose, review, approve, sign and record each decision. Start with spending, bank payments, contracts, hiring and reserved corporate matters; set rupee thresholds and an escalation path for exceptions. The Best CS Firm In India standard is a signed policy that matches actual bank mandates, board resolutions and shareholder rights—not a spreadsheet nobody follows.
Separate four roles before setting limits
| Role | Question | Typical evidence |
|---|---|---|
| Requester | Who needs the commitment? | Business case, budget line, vendor quote |
| Reviewer | Who checks legal, tax, security and conflicts? | Review notes and redlines |
| Approver | Who decides the company may proceed? | Dated approval in an auditable system |
| Signatory | Who may bind the company or release money? | Authorisation, mandate and signed document |
One person may hold several roles in a small team, but a material payment should not be requested, approved and released by the same person. Approval authority and signing authority are related but not identical.
A practical starter matrix
| Decision | Working owner | Escalation trigger | Record to save |
|---|---|---|---|
| Routine budgeted spend | Budget owner plus finance check | Above approved threshold or outside budget | Invoice, budget, approval |
| New vendor or software subscription | Function lead | Personal data, IP, auto-renewal or material liability | Vendor review and agreement |
| Customer contract | Sales lead with legal review | Non-standard indemnity, exclusivity, IP or data terms | Approved redline and signed version |
| Bank payment | Finance maker and authorised checker | New beneficiary, unusual amount or related party | Bank trail and supporting invoice |
| Senior hire or equity promise | Founder and people lead | ESOP, director role or plan deviation | Offer, approval and cap-table update |
| Shares, borrowings or major asset sale | Board or shareholder process as applicable | Always check law, articles and investor consent | Notice, resolution and required filing |
Set exact thresholds only after checking your company’s budget, articles, financing documents, board resolutions and bank mandates. A generic ₹ limit copied from another startup can create false comfort.
Build the matrix in seven steps
- List all commitments: money, contracts, hiring, data access, IP, borrowing and equity.
- Find existing authority in the articles, board resolutions, shareholder agreement and bank mandates.
- Define ordinary-budget thresholds and higher-risk triggers independently.
- Assign a primary approver and a documented backup, with conflict-of-interest recusal.
- Require a reviewer for tax, legal, privacy or security issues where relevant.
- Publish the matrix in the team’s workflow and train requesters and signatories.
- Test a sample of decisions monthly and update exceptions at a board review.
Do not let a spending threshold override reserved matters
Board and shareholder rights can apply even to a low-value transaction. Share issuance, borrowings, related-party arrangements, disposal of important assets or changes to the business may need approvals beyond a founder’s ordinary operating limit. Confirm the legal route for your entity and transaction before signing.
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Exception checklist
- Is the request outside the approved budget or policy?
- Does the counterparty have a founder, employee or investor connection?
- Is there a long term, auto-renewal, guarantee or uncapped liability?
- Does the contract transfer IP or personal data?
- Is the bank beneficiary new or recently changed?
- Does an investor consent, board resolution or statutory filing apply?
Founder / Business Takeaway
Make the routine path fast and the unusual path visible. A short authority matrix prevents “I thought someone approved it” from becoming a cash leak, disputed contract or diligence problem.
Suggested internal links
Official reference
- MCA Acts and Rules — check company-law powers and approvals against the current Act and your entity documents.
FAQ
Who should approve a startup payment?
A budget owner should approve the business need, while an authorised checker verifies the payment evidence and bank details before release.
Can founders delegate every decision?
No. Law, articles, bank mandates and investor documents may reserve a decision to the board or shareholders.
What is the first implementation step?
Inventory the company’s real decisions and current signing authorities; then write the matrix around those facts.
