How do we sign on behalf of our company?

Entity Choice

Companies are artificially created entities, and therefore cannot sign documents or contracts. A company can enter into any type of binding legal contracts or promissory notes or leases by only the action of its one of the officers or employees with the legal authority to bind the company and sign on behalf of the company. One of the key reasons for many business owners or managers to form a corporation or limited liability company (LLC) is to protect themselves from personal liability from the company debts and the liabilities of the business, should the business be unable to pay to its creditors and fulfill its obligations. As a general rule, it is true that an officer or employee of the company would not be personally liable for the company’s debt in the event of a breach of such an agreement, provided that the contract has been properly signed and executed on behalf of the company. There are, however, cases where these individuals sign their names without mentioning their titles and not having put across their intent to the other party that they were signing the document on behalf of the company in an official capacity: In some of these lawsuits the officer or employee was personally held responsible even though they intended to sign on behalf of the company.

For this reason it is critical for the officer or employee of the company, who is signing the document, to ensure that the other party knows undoubtedly that the signatory is entering into the contract on behalf of the company and not in a personal capacity. First of all, make sure the other parties to whom you are communicating, knows that they are dealing with an entity not an individual, therefore, us letterhead of the entity in business dealings and correspondence. Also list the company as one of the parties in the beginning of an agreement where the parties are referred. Finally, when signing the agreement make sure to write your company’s name before your signature and your title in the company under your signature so it is unmistakable that you are signing the document as a representative of the company, not personally.  It is also possible that you can state “on behalf of the Company X” under your signature to clear up any confusion.

For example:

XX INC. or LLC.

By:(Signature)

Your Name, (Title (e.g.,President))

 

If you have any concerns regarding business law matters, please contact Gokhan Yazici, Esq.

 

Gokhan Yazici

Gokhan Yazici is an experienced attorney and counsellor practicing in the state of New York. He is specialized in U.S. Immigration Law, Corporate & Business Law, Business Transactions, Commercial Litigation, International Trade & U.S. Customs Law. Mr. Yazici holds an LL.B. degree from Istanbul University Law School and an LL.M. degree from Temple University James Beasley School of Law.