If you're the owner of a limited liability company, then you know how important it is to sign checks correctly. Checks that are signed improperly can be returned to the payee, which can cause payment delays and added stress.
This article will explain what LLC checks are and why they need to be signed correctly. We'll also provide a complete guide on how to sign them properly so that you can avoid any problems.
Who Should Sign the LLC Checks?
A limited liability company represents a business entity managed by LLC members or managers.
They are the only authorized individuals who can sign checks on behalf of an LLC. The company's president or CEO generally makes the signature.
The check should always include the name of the LLC and the person signing it. This will ensure that there is no confusion about who is authorized to sign on the LLC's behalf of the company. It also helps to prevent theft or fraud.
When signing a check, the LLC member or a managing member should always use their full legal name.
This will help to ensure that the check is processed correctly and that the funds are deposited into the correct business account.
It is also essential to keep in mind that not all banks will accept checks signed by an LLC. Always contact your bank to see if they have any restrictions on LLC check signing.
If you are the only LLC member, then you will be the only one who can sign LLC checks. If you have a manager, they will also be able to sign on behalf of an LLC.
What Should Be On LLC Checks?
When you sign documents on behalf of the limited liability company, you must maintain your limited liability protection and assets.
This means that you need to be very careful about what is included in the checks; otherwise, you risk jeopardizing your personal assets through personal responsibility.
The following should be included in business checks:
- The company name
- The phrase "Member Check"
- The proper signature of at least one member of the LLC
If any of this information is missing, the check may not be valid.
The name of the company should be included prominently on the check so that there is no confusion about who the check is from.
The phrase "Member Check" confirms that this is a check issued by the LLC and not by an individual LLC member.
Similar Article: How to Open an LLC Bank Account?
Use a Signature Block
A limited liability company is a business structure that can help protect your personal assets in the event that your business is sued. One way to further protect yourself is to use a correct signature block when signing your LLC checks.
A signature block is your name, signer's title, and contact information written out below your signature on a check.
By including this information, you are making it clear that you are signing the check as authorized representatives of the LLC and not personally. This can help protect you from personal liability if the LLC is sued.
The Importance of Signing LLC Checks Properly
LLC status offers many advantages to business owners. One of the most important is that it provides personal liability protection for LLC members.
This means that if something goes wrong with the business entities, the members are not personally liable for business debts or damages.
However, this liability protection can be lost if LLC members do not sign their checks properly. When an LLC member signs a check, they should sign it using their title and full name. For example, John Smith, Member.
By signing LLC checks properly, members are helping to ensure that the liability protection afforded by LLC status is not lost. Additionally, it can also help to prevent fraud and theft.
There are a few different ways to sign LLC checks. The most common way is to sign them as follows:
- "Member's Name, LLC"
This method is straightforward. It indicates that the LLC member is signing on behalf of the LLC.
- Another way to sign your LLC checks is to use what is known as a title block. This involves signing the check using the member's full name and title. For example, John Smith, Managing Member.
This method is a little more formal, but it can help prevent fraud or theft. It also clarifies that the LLC member is authorized to sign checks on behalf of the LLC.
No matter which method you choose, be sure always to sign your LLC checks using your full name and title. This will help to ensure that the limited liability protection afforded by LLC status is not lost.
Can My Registered Agent Sign LLC Checks?
Your registered agent can have the signing power for legal documents if your operating agreement stipulates such a rule.
However, they cannot sign the LLC checks unless you authorize them in the operating agreement. If you want your registered agent to have signing authority and act as your representative for legal purposes, you must include it in the agreement.
What Is the Proper Signature for an LLC Owner?
Signing checks is one of the most common ways LLC owners have to endorse their company name. The endorsement area is the strip on the back of a check that you sign.
When you sign this area, you are authorizing the bill to be cashed or deposited. Your signature on a check must match your LLC's bank account name.
How Do You Give Someone Signing Authority?
Contracts are essential when it comes to signing authority. You'll want to keep careful records when you're drafting these contracts and ensure that you're spelling out exactly who is authorized to sign on behalf of the LLC.
There are a few different ways that you can give someone within the business entities signing authority. You can give them what's called a power of attorney, which is a legal document that authorizes them to sign on your behalf.
You can also give them what's called a limited power of attorney. This is similar to a regular power of attorney, but it limits the specific actions that the person is authorized to take.
Can I Deposit My LLC Check Into My Personal Account?
You can, but it's not good practice. Your personal account shouldn't be used to pay LLC debts and vice versa. It's recommended to keep your business and personal bank account separate, so consider making a business checking account.
How Do I Endorse Checks Made Out to My LLC?
When the owners endorse a check made out to the LLC, they should sign the check using their legal name as it appears on the account, followed by "member" or "manager." If you're signing a check on behalf of your LLC, you'll need to write "By: (Your Name), Manager" or "By: (Your Name), Member."
Make Sure Your LLC Checks Are Properly Signed
If you are a small business owner with little legal experience, it is best to seek help from an attorney or law firm.
Legal services can provide guidance on avoiding problems with your business and help ensure that your company is compliant with all applicable laws.
Working with an experienced legal team can relax knowing that your business is in good hands.