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?
- Insert the complete corporate name including “Inc.,”
“Corp.,” etc.
- 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.
- 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
- 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.
- 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:
- Owner:
ACME, LLC (this is what is written into the “Buyer” or “Seller” lines.
- 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,
- 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
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