Signing on Behalf of the Corporation - Avoiding Personal Liability
By J. Christa Thomas | November 30, 2002
An operator of a corporation must identify the full name of the corporation in his or her dealings with outside parties, or risk being found personally liable.
Always use the corporate name. The corporation must set out its name in legible characters on all contracts, invoices, negotiable instruments, orders for goods or services, business cards, web site, e-mail, etc.
Dropping the word "Inc.", "Ltd.", or "Corp." from the corporate name is an improper use of the corporate name because it does not drive home to the opposite contracting party that it is dealing with a corporation.
Saturate the corporation's full name on all business dealings (e.g. on signage, cheques, business cards, letterhead, fax cover pages, web site, e-mail, purchase orders, business contracts and other external communications) in order to minimize the chance that the opposite contracting party will not be aware that it is dealing with a corporation.
Contracts signed on behalf of the corporation should be in the following format:
Your name – authorized signing officer
Consequences. Failure to use the full corporate name might in certain circumstances result in the person who signed the contract or entered into the agreement being held personally liable (i.e., a creditor may sue you personally).