Importance of Signing Properly for Your LLC
Provided by HG.org
Signing documents properly is essential to ensure they are legal and valid. Without following through and checking this concern, the owner or partner of a limited liability company may find that his or her business is not a legitimate legal structure.
The need for signing documents and files correctly is important primarily for legal purposes. When any contract or paperwork has not been signed appropriately, the deal or arrangement is not valid. Certain provisions may not be enforced in a court of law. Additionally, the company itself may not be a business entity when the signature has not been applied properly. This affects the owner, partners, management and employees equally. Without signing the documentation accordingly, the company cannot do business legally or validly. This would invalidate contracts, client relationships and other interactions necessary to run a company.
For those that are confused about contract information, it is better to contact a legal professional or other expert in these matters than to sign the document incorrectly. Even attempting to forge or sign paperwork in this manner could lead to severe consequences. The name that should be signed is the one that will be used as the title within the organization that the owner has created. For an LLC, this could be a partner or owner. This then shows that he or she has signed on behalf of the company itself rather than as an individual person not connected to a business entity.
LLC Title Importance
The actual title of an LLC is important to everyone within the company whether they realize it or not. The actual signature on the documents must be valid and proper. This would include the title of the person that is signing such as manager, director or partner. If the person is a member, his or her signature may be necessary for certain actions, but the owner should be signing these papers with his or her title within the company. The full name as used in legal documentation is necessary, and this person should use his standard signature as on other documents. For certain files, others must understand that the person signing has authority to complete the form and that it is signed on behalf of the company.
Any alterations of the standard processes could cause complications to the owner. When he or she has signed the document as if he or she were signing any other piece of paper outside of the company, it may appear that he or she is not aware of the proper protocol. This action could also show others that he or she does not care enough to learn what is needed for signatures on behalf of an LLC. This could lead to conflict with another company, a legal entity or government contracts. Without signing on behalf of the LLC, the owner could invalidate the process or end a project with another entity.
Incorrect Signatures Problems
Part of the protections provided by an LLC could be revoked when the LLC owner or partner signs documents with his or her name and no their information such as a title. This then leads to exposure of personal assets for litigation attacks when there are issues with the contract. For the owner, he or she could sign his or her name only, and then if there is a breach or a default of the agreement, the other party involved may have the capability of suing the owner personally instead of attacking the company. The personal assets such as a house, car, bank account and similar items could be targeted. This places these items at risk of seizure if the judgment is in favor of the other party.
The proper signature should have the name, title and name of the business entity all attached to documentation. The agreement signed should have details about one party and the LLC and not a specific person only. With these specifics, the signature identifies the person, his or her title, the authority granted from the company and the contracting party involved. When a new LLC is being created, this could require both personal and company signatures. Any borrowed funds may also need these combined measures.
Legal Representation in Signatures
A business lawyer should be retained for various business needs. This professional may be contacted for professional advice and when certain signatures are necessary based on the transaction. This could then prevent possible disaster and avoid contract and client complications from arising or with litigation.
Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.