How to Sign on Behalf of an LLC

By Larissa Bodniowycz, J.D.

How to Sign on Behalf of an LLC

By Larissa Bodniowycz, J.D.

For legal purposes, a limited liability company (LLC) is equivalent to a person—it can take actions such as bringing and defending lawsuits, purchasing property, lending money, entering contracts, and making donations. Unlike a person, an LLC does not actually exist in the physical world. It signs through its authorized representatives using a signature block that indicates that the representative is signing for the LLC.

Businessman holding pen above notebook

1. Sign as an authorized representative.

Because LLCs have no physical form, they must act through their authorized representatives, their members (owners) and managers, for all purposes. This holds true for signing documents. By default, all members have authority to act on behalf of the LLC.

An operating agreement can modify this default rule by expanding or limiting the authority of persons involved with the LLC. It is common, for example, for an operating agreement to appoint nonmember managers to manage the LLC and grant them signing power. In the converse situation, an LLC might limit the authority of one or more of its members.

A document that is signed by someone not authorized to act on behalf of the LLC, such as a very low-level employee, will likely be held invalid.

2. Include a signature block.

One of the most important advantages of a limited liability company is the limited liability that it affords its members. Once the members form an LLC, their personal assets are protected from the reach of creditors. This protection, however, is not absolute.

Members and managers may open the door for an argument that they undertook personal responsibility for the terms of the document if they improperly sign documents for the LLC. For example, if a member signs a lease without indicating they are signing it for the LLC, the landlord may argue that the member agreed to be personally liable for the lease and attempt to pursue the signer for the rental amounts due if the LLC is unable to pay.

Members and managers can easily avoid scenarios that put personal liability protection at risk by using a proper signature on documents signed on behalf of an LLC. A proper signature on behalf of the LLC is one where it is clear that the signer is signing in their representative capacity for the LLC, not for themselves. There is no precise formula for a proper signature block, but the following is an example of a good signature block:

Small Business USA, LLC

By: ________________________

Joe Smith, Managing Member

If the preprinted signature block does not show the signer's title, the signer can and should write it in next to their signed name. For example, instead of signing "Jane Smith," the signer would sign "Jane Smith, Member."

3. Read the whole contract.

LLC authorized representatives should always read through the entire contract before signing on behalf of the LLC. Sometimes, the terms of a contract itself state that the signer is undertaking personal responsibility for the obligations of the contract or personally guaranteeing that the LLC will perform its obligations under the contract. In these cases, a signature block probably will not be enough to overcome the contractual provisions.

LLC members and managers can avoid putting personal liability protection at risk by using a signature block on any document signed on behalf of the LLC. A proper signature block includes the name of the LLC and the member or manager's name along with their title, like "John Smith, Member." This way, it is clear that the signer is assuming their full representative capacity for the LLC rather than for themselves.

This portion of the site is for informational purposes only. The content is not legal advice. The statements and opinions are the expression of author, not LegalZoom, and have not been evaluated by LegalZoom for accuracy, completeness, or changes in the law.