Perhaps that which we call a rose by any other name would smell as sweet, but signing the name of the wrong party on a document can cause a business agreement or land transaction to sour.  It is common sense that when you enter into an agreement with another party, you want to make sure that you are binding that party to the agreement. It is easy to make this determination when you want to sign an agreement with an individual in his or her sole, personal capacity. However, what if you are attempting to bind that person’s company to the agreement? On the other hand, what if you want to sign an agreement in your company’s name, and not in your individual capacity, in order to avoid personal liability under the agreement? In these instances, it is vital that the agreement is made in the name of the correct, desired company, and the proper person within that business entity executes the agreement.

In order to contract with the proper business entity, the agreement should name the desired entity in the introductory paragraph of the agreement. This establishes the intended parties to the agreement before the details of the agreement are presented. Once the parties’ names are established in the introductory paragraph, such names should be exactly the same as the parties’ names in the signature blocks at the end of the agreement. As such, it is important that you know the correct legal business name of the entity that you are contracting with.  Also, in order to legally bind that business to the contract, you must ensure that the proper person, with the proper authority, signs on behalf of the company. When this information is known, you can properly complete the agreement’s signature block with the correct signatory, signatory’s title, and company name.

In my experience, I have found that clients are often confused as to how they should sign on behalf of their entity.  For example, a Limited Partnership (LP) must be signed by the person who has the title of “General Partner”.  However, in a Limited Liability Company (LLC), a duly authorized “Manager” or “Member” must sign for the entity, depending on how the LLC is established.  Sometimes, you will have a Limited Partnership with a business entity as the General Partner.  In this case, you will need to have the proper person sign for that business entity as the General Partner for the Limited Partnership.  If your head is spinning, here are some examples of signature blocks for different business entities that can help serve as a guide; however, like all aspects of the law, there are exceptions and special circumstances where changes or additional details are required:

  1. Corporation:

THE BLUTH COMPANY, INC.

By: ________________________
Michael Bluth
President


  1. Corporation with a fictitious name:

THE BLUTH COMPANY, INC.
d/b/a Bluth’s Original Frozen Banana

By: ___________________________
Michael Bluth
President

 

  1. Limited Partnership:

THE BLUTH COMPANY, LP

By: ______________________
Michael Bluth
General Partner

 

  1. General Partnership:

The Bluth Boys

By: ______________________
Michael Bluth
General Partner

 

  1. Limited Liability Company:

THE BLUTH COMPANY, LLC

By: ______________________________
Michael Bluth
Manager

 

  1. Sole proprietorship:

________________________
Michael Bluth
Sole Proprietor

 

  1. Limited Partnership with a Corporate General Partner:

THE BLUTH COMPANY, LP

By: The Bluth Company, Inc.,

General Partner

By: ______________________________
Michael Bluth
President

 

  1. Limited Partnership with a LLC as General Partner:

THE BLUTH COMPANY, LP

By: The Bluth Company, LLC,

General Partner

By: ______________________________
Michael Bluth
Manager

Whether you want to bind the correct party to a multi-million dollar contract, ensure that real estate is passed to and from the correct parties in a deed, or execute a document in your capacity as an executor for an estate – names matter.  If you need assistance in drafting business documents, reviewing an agreement that you are asked to sign, or establishing a business entity to provide you with personal liability protections, please do not hesitate to contact us.