Signing: buyer(s) or seller(s) is a CORP or LLC

Signing: buyer(s) or seller(s) is a CORP or LLC

What do I do if one of the buyer(s) or seller(s) is a CORP or LLC? 

  1. Insert the complete corporate name including “Inc.,” “Corp.,” etc.
  2. Verify the name of the corporation. It is important to obtain a Company Resolution. This is a signed document by all members of the LLC appointing an individual (oftentimes a fellow member) to act as agent on behalf of the LLC and vesting authority in that individual to contract for the purchase or sale of the specified property. Check with the Florida Department of State, Division of Corporations at http://www.sunbiz.org. All parties should be comfortable that signer has the legal authority to sign contracts as a member or manager. Also, the signer should be careful not to sign the document personally, but on behalf of the LLC.
  3. Know how the signature will look: The proper signature should include the signers name, title and the name of the organization. The agreement will specifies that the contract is between one party and the LLC. The proper signature is "John Smith, Manager, ABC Company, LLC." Since companies cannot sign for themselves, this signature identifies the person signing, the title and authority

Potential Problems With Incorrect Signatures

  1. Signing an agreement with  a name only has risks of exposing personal assets in the event of a problem with the contract. Signing simply as "John Smith," is  effectively signing personally, which could leave that signer open to a personal law suit of the person, and the name of the contracting party. 
  2. Signing a contract incorrectly could render the contract unenforceable.  If a contract is unenforceable, a court cannot force either party to perform its obligations under the contract.

DOTLOOP:How Clients Sign as POA or LLC 

https://support.dotloop.com/hc/en-us/articles/360055669671-How-Clients-Sign-as-POA-or-LLC-

Correct Signature Example:

  1. Owner: ACME, LLC (this is what is written into the “Buyer” or “Seller” lines.
  2. Verify Check with the Florida Department of State, Division of Corporations at http://www.sunbiz.org. You learn that James B. Jones has been named and appointed by the signed Company Resolution,
  3. Signature: James B. Jones, Authorized Member of ACME, LLC

Reference:

https://www.stoel.com/legal-insights/article/legal-formalities-in-contracts-can-be-perilous-pitfalls