For a business, it’s important to know who can sign on behalf of an LLC. The LLC owners, or members, are able to sign. Who else might be authorized to sign critical documents?
Lucky for you, this guide lays out all you need to know about successfully signing documents for your LLC.
Who Can Sign on Behalf of an LLC?
An LLC’s operating agreement should clearly define each member’s ownership share, responsibilities, and interests in the LLC. It should also outline how profits and losses will be allocated to each member and the management structure and roles.
Operating agreements usually also define the voting rights of each member, along with the rules for voting meetings. They also clarify what happens when a member sells their interest, becomes disabled, or dies.
A vital element of the operating agreement is outlining the LLC’s management structure. This should include the roles and responsibilities of each manager, as well as which documents they are authorized to sign.
The operating agreement allows LLC owners to determine which employees can sign documents. If an unauthorized person signs documents, they will be deemed invalid and not stand up in court.
This is one reason operating agreements are so important.
When signing documents on behalf of an LLC, the signature block should clearly state the LLC’s name, the authorized representative’s name, and the individual’s title. For example:
- Jane’s Bakery, LLC
- Jane Doe, Managing Member
The title does not need to be included in the signature, but it does need to be specified somewhere within the signature block.
One of the most significant advantages of forming an LLC is the personal liability protection they offer to members. This means that when members sign documents on behalf of the LLC, they are not personally liable for the financial obligations within those documents.
However, suppose signatures do not include the LLC name or the authorized signer’s title. In that case, it can be argued in court that the signer signed the document personally, which might jeopardize their liability protection. In other words, an incorrect signature format could put your assets at risk.
Before signing any document on behalf of an LLC, carefully review the document to make sure no language can make you personally liable for any outlined obligations. This also includes any language around personally guaranteeing a particular obligation.
If you’re uncertain about language in an official document, it’s a good idea to consult an attorney before signing.
An LLC is a business, not a human being, so it can’t sign official documents. As a result, LLC owners must choose and designate authorized signers, usually done within an operating agreement.
Once all that’s settled, just be sure to carefully review all documents before signing and work with an attorney if clarification is needed.