How to sign business contracts

By Nadia Cabrera-Mazzeo, Esq.

Short Answer: Business owners should sign business contracts on behalf of their company by putting their title and the business’s legal name every time they sign.

Best practices for signing business contracts to keep a strong liability shield

An easy culprit for a weakened liability shield for a small business is an incomplete or incorrect signature on a business contract. Remember, it’s the company entering into the agreement and being bound by its terms, not you personally. When entering into agreements on behalf of a business, owners should take care to include their title and legal business name along with their signature to show that they are signing in a representative capacity.

Legal Business Name

As a general rule, business contracts should always have the business’s legal name. For example, although I do business as “Honest Contracts” or “Honest Contracts Law Firm,” the legal name of my business is “Honest Contracts, LLC” and that’s the name I put on all business contracts and government documents.

This is especially important in a state like New Mexico that does not require businesses and individuals to register fictitious names, or dba (“doing business as”) names, with the Secretary of State. There may be no official government record that connects the fictitious name with the legal business. My example is straightforward, but sometimes businesses use dba names that are unrelated to their legal name.

How to Sign on Behalf of a Business

Many business contracts already have the title and legal business name of the signer typed out under the signature line, so it’s a no-brainer. But say your business is buying a used car or entering in some other kind of less formal transaction where things aren’t neatly written out. In that case, you can write in the business details yourself:

[Your Signature],
[Your Name],
[Your Title],
[Legal Business Name]

This can feel weird and unusual when there’s clearly no room for all that hubbub in the signature area, but it’s better to be safe than sorry.

If you want to include the company’s trade name in addition to its legal name, you can write it out as:

[Legal Business Name],
d/b/a
[Fictitious Name].”

What happens if someone signs it wrong?

What happens if someone signs a business contract incorrectly (or incompletely) varies depending on the situation, but what’s certain is that it will make a contract dispute messier. The parties may have to make legal arguments to hash out issues with the signature.

A lot of it comes down to how the signer represents themselves and whether it is clear to the other party that the signer is signing on behalf of a specific company. If it’s not clear to the other party that the signer is signing on behalf of a specific company, then the signer could potentially be personally liable for the terms of the contract.

Examples

Example 1:
Nadia signs a business contract as “Nadia Cabrera-Mazzeo, Attorney/ Owner, Honest Contracts”

Here, it’s pretty clear that I am signing on behalf of Honest Contracts, LLC, even if I forgot the “LLC” part. Still, it would be better to put the full legal name of the business.

Example 2
Nadia signs a business contract as “Nadia Cabrera-Mazzeo, Attorney, Honest Law Firm”

Here it is less clear what company, if any, is entering into the contract. There is no business registered with the state called “Honest Law Firm,” or maybe there is and it’s not my company, Honest Contracts, LLC.

Example 3
Nadia signs a business contract as “Nadia Cabrera-Mazzeo, Attorney”

In this case, it’s not clear at all that I’m signing the contract on behalf of my business. Even if the contract itself refers to “Honest Contracts,” this could create problems.

What about sole proprietors?

In a sole proprietorship, there is no legal difference between the business and the business owner.

So the legal name of the business is the owner’s legal name and the owner is always personally responsible for the terms of the contract.

Still, sole proprietors should take care to put their full legal name in contracts and government documents. Failure to do so will likely not get you out of it, but it might drive up costs if lawyers have to fight about it during a dispute.

Law office of Nadia Cabrera-Mazzeo, Esq.

Based in Taos, serving clients throughout New Mexico

505 427 2025

nadia@honestcontracts.com

The information on this website is not legal advice and does not create an attorney-client relationship. The rates and fees listed on this website may not be the most up to date.