Sign Your Corporation’s Name So You Aren’t On The Hook


John Hancock knew how to sign his name- so large that King George could read it without his glasses.

But most small business folks who do business as a corporation are clueless when it comes to signing contracts on behalf of their corporation.

When they sign their name, without more, on the line that says “Owner”, they may have made themselves personally liable for the obligations in the contract. Fotoliafishhook © johnsroad7-cropped

Signing just your name likely defeats the very reason that you incorporated your business.  You’ve just put yourself personally on the hook.

Why your business is a corporation

In the law, a corporation is a legal person, separate from the individuals or other entities who own its stock.  Despite how invested, financially and emotionally,  you are in your business, you and the business are really two separate entities.

The invention of the corporation made it possible for business people to limit their risk in an incorporated business to the amount they paid for their stock.  The creditors of the corporation couldn’t collect their claims from the stock holder.

That ability to limit your risk, to keep your business creditors away from your personal assets, probably figured large in your decision to incorporate.

How a corporation gets things done

Because a corporation is a “person” without any fleshy substance, it needs people to act for it.

Those people are its employees, managers, or its officers.  They can wield a pen and sign for the corporation.

A signature on a contract serves as proof that the signatories take on the benefits and burdens described in the written documents.  Physically, a real, live person has to sign.

But how do you sign for the corporation?

Acting for the corporation

Let’s assume that the document in question is an order for the design of a new website for your business and a year’s worth of maintenance.

You are the stockholder, president, and the manager of  My Business, Inc.  (For most of us small business folks, we are also the secretary, janitor, bookkeeper for the business as well.)

If this deal goes south, you don’t want the service provider suing you, liening your house, and garnishing your wages.  This is a corporate deal.

So, here’s how you sign the contract on behalf of your corporation:



By  Your Name, President

You sign your name as you always do, but in your capacity as an agent of the corporation.  Contracts don’t have to be signed by the president.  They can be signed by any party the corporation has authorized to act for it.  You could be, just as legally, the vice president, the CFO, or the general manager.

By adding your role in the corporation, you have signaled that the party to the agreement is the corporation, not you personally.  The entity making the promise to pay is the corporation, My Business, Inc.

Your signature as a representative of the corporation doesn’t put you personally on the hook for payment.

Good work, Mr. President!


Fish hook image:  © johnsroad7

Get Out From Under Student Loans In Half The Time

Work full time for a governmental agency or non-profit, and you can discharge your federal student loans after 10 years of payments. Regardless of the balance. Tax free. And regardless of the job you hold in a qualifying employer. Rich man, poor man, Beggar man, thief. Doctor, lawyer, Indian chief ! Not sure about these…

Tax Trap When You Settle Debts Outside Of Bankruptcy

Trying to decide between bankruptcy and debt settlement as the better path to financial health? Own a home? Here’s the killer reason why bankruptcy alone protects you from a serious tax consequence down the road. Debt forgiven outside of bankruptcy gets deducted from the basis of your home.   Result:  more potentially taxable capital gains on…

The Secret Bankruptcy Discharge For Community Property

  Psst! Let me tell you a secret about bankruptcy law. You can get 3/4 of the benefits of a bankruptcy discharge without ever going near a bankruptcy court if you are a married person in California, or any other community property state. If your spouse files bankruptcy and you don’t join in, you still reap…

Free Expert Help With Your Bay Area Home Loan Modification

Applying for a mortgage modification is equal parts torture and miracle drug. It can mean the difference between staying in your home and foreclosure. Yet it comes with more questions than answers. What’s the difference between HAMP and HARP? Do I want to appear broke or prosperous? Should I default before I apply? Critical questions, the…

Warning: Wells Fargo Can Freeze Your Account

Preparation for filing bankruptcy should include getting your money out of Wells Fargo Bank. Unless, of course, you’re willing to have Wells freeze your money for days or weeks, on its own initiative. Wells says they are “helping” the bankruptcy trustee by denying you access to your money.  Only the bankruptcy trustee didn’t ask for…

Wage Garnishment Survival Guide

“Your wages have been garnished, ” reads the letter from your employer. Do nothing and twenty-five percent of your after tax earnings will be sent to your judgment creditor. So, do something:  keep reading this action guide for Californians subject to a wage garnishment. This guide has three parts: the short run guide for minimizing the…

The Most Costly Community Property Blunder

What do you do when creditors from your spouse’s past threaten? Chances are your first reaction is to put the title to your biggest assets in just your name. Whew! Safe. Not. Just because  the deed to the house now reads Jane Doe instead of John Doe and Jane Doe it’s easy to think the house is Jane’s separate…

Claim Tax Deductions Lurking In Your Chapter 13

  Tax deductions may be hiding in your Chapter 13. Did you file for an extension of time to file your income tax return? Well, time to get the return done is running out:  returns are due October 15th. If you are in a Chapter 13 bankruptcy case, you may have deductions you haven’t considered…

California Restores Mortgage Debt Relief for 2013

California taxpayers who lost their home to foreclosure or a short sale in 2013 got a last minute tax break when the legislature extended favorable tax treatment for forgiven mortgage debt. The state law covers only sales or foreclosures occurring prior to January 1, 2014.  It mirrors but is less expansive than the federal law on…