Individual capacity refers to actions performed personally. In individual capacity, the person acts for themselves, rights and obligations attach personally, personal decisions create personal responsibility, and authority comes from personal ownership or legal rights.

Examples:

• Signing a personal agreement
• Managing personal property
• Making individual decisions
• Communicating on personal matters

In individual capacity, the actor bears personal liability for their actions. No separate fiduciary duty is owed to another party absent a special relationship.

Representative capacity exists when a person acts on behalf of another person, entity, trust, estate, organization, or authorized relationship. The representative does not act as the beneficial owner. The representative acts according to delegated authority, governing documents, fiduciary obligations, and defined responsibilities.

Examples:

• Trustee acting for a trust
• Manager acting for an organization
• Officer acting for an institution
• Authorized agent acting for a principal

In representative capacity, the actor owes duties to the represented party. The representative is accountable for the proper exercise of delegated authority.

Failure to identify capacity creates confusion regarding who performed the act, who receives the benefit, who carries responsibility, and what authority controlled the action. Proper administration requires clear attribution. When capacity is unclear, records become unreliable, accountability becomes difficult to enforce, and institutional memory suffers.

A complete administrative record should identify the actor (who performed the action), the capacity (what role was being exercised), the authority (what document, position, or relationship authorized action), and the purpose (for whose benefit was the action taken). Signatures should include capacity designation (e.g., "John Doe, Trustee").

Never assume capacity. Establish capacity through written records, titles or roles, governing instruments, and documented authority. If capacity is not recorded, the action may be treated as personal rather than representative. Authority cannot be inferred from action alone; it must be documented and attributable.

• Mixing personal and representative roles without distinction
• Executing documents without capacity designation in signature blocks
• Assuming title alone defines capacity without supporting authority records
• Using personal accounts or resources for representative purposes
• Failing to maintain separate records for personal and representative actions
• Relying on verbal authority rather than documented delegation

Strong governance systems maintain separation between individual identity and representative authority. Clear capacity preserves accountability, protects records, and supports proper administration. Institutions should require capacity identification in all formal communications, approvals, and recordkeeping. When capacity is ambiguous, the institution bears the risk of misattribution.

• Status, Standing & Capacity (KLI-SSC-001)
• Capacity and Authority (KLI-KL-FID-010)
• Authority Delegation (KLI-KL-GOV-004)
• Record Attribution (KLI-SSC-003)