Can Employees on Probation Sign Deals? Understanding Probation Rules in Startups

Hi there,

I am working at a startup company and require assistance regarding probation rules and regulations.

1. Can every employee, from the CEO to the executives, be placed on probation?
2. Does an employee in the probation period have the authority to sign offer letters or other business deals?

I urgently need information on these questions. I am looking forward to your response.

Thanks and Regards,
SKH

1. Is it possible for every employee to be on probation, starting from the CEO to the executives?
---No, this is not possible. You cannot put managerial and CEO-level staff under probation. Non-managerial personnel (including those at and below the AM level) can be placed on a probationary period.

2. Does an employee in the probation period have the authority to sign offer letters or other business deals?
---No, the employee cannot sign any business deals. However, the employee can sign an offer letter.

1. Yes, all the positions in the company can be on a probationary period, unless the CEO is also the founder (and if you want to treat his case as an exception).

2. Once you have appointed someone to a role that demands them to have signing authority, you should not consider them to be on probation. Because at the end of the day, he/she is performing the role expected of them.

Cheers, Nikita

Hi Nikita,

I don't think it would be a nice option to put a CEO on a probation period. It does not meet the business ethics. Also, if the person is a signing authority, especially for business deals (which usually would be a Managerial Level person only), his position in the organization would totally affect the deal because the organization cannot escape/deny later on that the person was under probation, and the company cannot be held responsible for his decisions.

So, as per my views, senior people should not be taken on probation.

Regards,
Sam

Hi all,

Thank you very much for the input! The CEO is also a member of the board of directors and the founder of the company. Therefore, as all of you mentioned, it would be inappropriate for him to be on probation. Could anyone inform me if there are any such rules in law or anything similar for my CEO's reference?

Thanks a ton again!

Sindhu