One of the things you’ll do as the owner of a limited liability company is sign. You’ll sign documents and contracts on the LLC’s behalf, and even if it doesn’t sound like a big deal, there’s a protocol behind this procedure you’ll want to follow before you put your personal name on the company’s papers.
Since we have vast experience in drafting legal documents that are in accordance with state law and advising our clients on how to sign on behalf of their companies or delegate this task to a registered agent or an employee, we can help you out in this matter.
This article brings clarity to this process, offering insights on crucial aspects such as the operating agreement, personal liability and protection of personal assets, legal documents, and the role of an authorized representative. Let’s dive straight in!
Brief Overview
- Having a clear understanding of LLC signature protocols is crucial to avoid potential legal complications.
- The document should explicitly state the signatory’s role for the LLC.
- Typically, authorized representatives include managing members or designated persons.
- Whenever there is uncertainty, it is advisable to seek guidance from a law firm or an expert in LLC management.
How to Sign on Behalf of an LLC – The Process Explained
When you sign contracts or other documents on behalf of an LLC, you first need to write the company’s full name. Follow this with your personal signature, then your name, and finally your official capacity in the business (e.g., manager or member), indicating you’re signing for your business entity.
We explain the process in detail below:
The Name of the LLC
Initiate every document by affixing the full legal name of the LLC. This ensures a clear distinction between personal and business liabilities, protecting the individual from becoming personally liable.
Representative’s Role in the Company
The document should clearly show the role of the person signing for the LLC, whether they’re a managing member, an officer, or a registered agent. This confirms they’re allowed to sign for the business.
Clauses that Specifies Authority
Always include a clause indicating the signatory’s power to sign on behalf of the LLC. This specifies the management structure and underlines the legal action taken is within the purview of the signer’s role.
Provide a Copy of your Power of Attorney
If applicable, providing a Power of Attorney (POA) lends further legitimacy, particularly in cases where the individual signing isn’t automatically authorized.
In our experience, understanding these protocols can truly make a difference and help avoid personal liability. Moreover, according to this paper, businesses adhering strictly to these guidelines are less likely to face legal issues related to contract language.
Who Can Sign on Behalf of an LLC?
In a limited liability company (LLC), the power to sign documents on behalf of a limited liability company typically resides with the managing member or designated person, as outlined in the company’s Agreement.
These authorized representatives have the ability to act on behalf of the LLC in signing checks and making key decisions, ensuring the smooth running of the company business.
- The Managing Member: In a member-managed LLC, any member (owner) has the authority to sign on behalf of the LLC.
- Designated Officers: In a manager-managed LLC, only designated persons – such as the president or a registered agent – sign on behalf of the company.
However, it’s important to note that specific state laws can influence the signature structure of limited liability companies. Missteps in this area could make the person signing personally responsible, underlining the need for comprehension of the LLC’s operating agreement.
How to Delegate Signing Authority on Behalf of an LLC
Delegating signing control within an LLC requires due diligence and a thorough understanding of your state’s laws and your company’s operating agreement. Here are the general steps to guide you:
Understand the Rules
Start by reviewing your LLC’s Agreement and your state’s laws. From our in-depth research, we’ve found that most LLCs have provisions within their operating agreement outlining the process of delegating authority.
Pass a Resolution
If the LLC’s Agreement allows, the LLC members or managers may pass a resolution to authorize a registered agent or another individual to sign documents on the company’s behalf.
Draft an Authority Letter
Next, draft a letter of authority that outlines the specific powers being granted to the individual authorized to sign documents on behalf of your LLC. For example, a limited liability company might grant Jane Smith permission to sign checks or contracts under the company name.
Notarize the Document
To further validate the paper and protect your limited liability company from any legal concerns, have the letter notarized.
Record the Change
Lastly, record this change in your LLC’s official records. This is a crucial step in maintaining transparency and ensuring that all members are aware of the change.
Related Article: What Is an LLC Executor
Wrapping up on LLC Signature Protocols
Signing documents on behalf of your LLC is a sensitive process that requires careful attention to detail. During our exploration of the process, we noticed the imperative role of a registered agent and the significance of a proper signature block.
Adhering to these protocols not only helps to legally secure your LLC but also lays a solid foundation for creating agreements and managing relationships with clients.
This can save time, expand resources, and bolster the position of your LLC. It’s not just about signing documents, it’s about representing your LLC with credibility, accuracy, and legal assurance.
