As an avid reader of contracts (yeah, I know – I’m the life of the party), I have to pay attention to the little things in a contract. The Signature Block is a teensy-tiny little piece of a contract which, if structured incorrectly, could have significant implications for the person signing the agreement. They normally look like this:
ABC Healthcare Company, LLC
Jane Doe, Member
If Jane were to sign this contract, she would be signing as the Member of ABC Healthcare Company, LLC. She’s signing the document on behalf of the company. The company is agreeing to the terms of the contract – not Jane as an individual.
What happens if the signature block looks like this – without mention of Jane’s role as owner of the company?
Is Jane signing on behalf of ABC Healthcare Company, LLC? NO!! She’s not. In this case, Jane is signing as an individual. If someone were to sue ABC Healthcare Company, LLC over the terms of this contract, they would likely be able to sue Jane (putting Jane’s personal assets at risk) as well.
See?? I told you this was important stuff to know!! Jane’s house and Jane’s yacht do not want her to sign as an individual. Jane doesn’t want to put her husband John’s assets at risk either.
If you are signing a document on behalf of your company, or as the owner of your company, you need to include the words “on behalf of [your company’s name]” or include your title in the signature block, such as “Member” or “President.” This small nuance shifts the liability from you as an individual to the company itself – which is why people form LLCs in the first place.
Erica Pero, an attorney with Pero Law, focuses her practice on health law. She helps healthcare professionals navigate the complexities of running a business in today’s healthcare industry. Pero Law is a lean law firm committed to excellent customer service and exceptional legal representation. perolaw.com