One of the reasons most business owners form a corporation or limited liability company is to avoid personal liability for the liabilities of the business.  Unfortunately, many business owners expose themselves to personal liability by not properly identifying the business when they sign agreements.  It defeats the purpose of forming the business entity if Joe Smith forms his business as XYZ, Inc. but then signs a contract with a supplier as simply “Joe Smith”. In order to maintain the benefit of the separate entity and avoid personal liability, the business owner should sign contracts, proposals, agreements and any other documents for a business as follows:

When entering into an agreement on behalf of a corporation:

[NAME OF CORPORATION – e.g. XYZ, Inc.]

By:                                                                             

[Your Name], President

OR

When entering into an agreement on behalf of a limited liability company:

[NAME OF LLC- e.g. ABC, LLC]

By:_____________________________

[Your Name], Manager

Business owners should also include the name of their corporation or limited liability company on their letterhead and email signature block.  The goal is to make sure that those with whom you communicate know that they are dealing with a business entity and not an individual.  If you have any concerns regarding business or business litigation matters, please contact Michael P. Doherty or one of the other business attorneys at Doherty, Ciechanowski, Dugan &Cannon, P.C.

This blog is for informational purposes only.  It should not be considered legal advice.  All those who read this blog should seek the advice of a professional before taking action based upon any information provided herein.