LLC signature on contract

Rental Property Investor · Tyler, TX · Member since 2016 · 198 posts · 89 votes

Good news! We have a contract about to go into force. I've never signed as the LLC, it's new to me. I forgot to ask my lawyer if I sign my personal name or the business name on the Commercial Contract - Improved Property. It may be a dumb question, but I remember hearing that you don't want your personal name anywhere. How should I sign? Any feedback would be appreciated. Thanks in advance.

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Jessica Zolotorofe

Attorney · NJ · Member since 2016 · 1k+ posts · 794 votes

No no. NEVER sign in your personal name. You should have an operating agreement that sets forth who the manager or managing member(s) are in every LLC. If you don't, always sign like this: 123, LLC, a [State] limited liability company By:______________________ John Smith, Manager (or Member)

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Mark Gallagher
Flipper/Rehabber · Allentown, PA · Member since 2011 · 1k+ posts · 701 votes
9y
@Shea Spinelli
If you're the sole member of the LLC, you have to sign the contract using your name. Typically documents will have to be notarized, and you can't notarize an LLC, you can only notarize a person. If there is more than one member of the LLC, the authorized signor of the LLC will sign.
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Shea SpinelliPro Member
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Rental Property Investor · Tyler, TX · Member since 2016 · 198 posts · 89 votes
9y
Thank you Mark Gallagher It is a single member LLC. My wife and I are both on it as the Managing Members. I didn't see anywhere for a notary on the contract.
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Mark Gallagher
Flipper/Rehabber · Allentown, PA · Member since 2011 · 1k+ posts · 701 votes
9y
@Shea Spinelli
You'll eventually notarize closing documents.
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Jessica Zolotorofe
Attorney · NJ · Member since 2016 · 1k+ posts · 794 votes
9y
No no. NEVER sign in your personal name. You should have an operating agreement that sets forth who the manager or managing member(s) are in every LLC. If you don't, always sign like this: 123, LLC, a [State] limited liability company By:______________________ John Smith, Manager (or Member)
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Jessica Zolotorofe
Attorney · NJ · Member since 2016 · 1k+ posts · 794 votes
9y
And that's not true either about the notary. Anything to be recorded and any note will likely have to be notarized in any LLC closing. Whether it's a single member or 100 members, the signature of the individual is notarized, acting ONLY in his or her capacity as a member or manager of the LLC. There's a specific notary block used.
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Shea SpinelliPro Member
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Rental Property Investor · Tyler, TX · Member since 2016 · 198 posts · 89 votes
9y
My wife and I are both the Managing Members Jessica Zolotorofe - are you saying we both need to sign all docs or can one act on behalf of the entity since it's a single member LLC?
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Jessica Zolotorofe
Attorney · NJ · Member since 2016 · 1k+ posts · 794 votes
9y
you can't both be "managing members" if there is only one member. Do you mean you are both managers? Who is the member? Depends what the operating agreement says, but usually only 1 manager has to sign on behalf of the LLC.
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Ned CareyPro Member
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Investor · Baltimore, MD · Member since 2008 · 17k+ posts · 13k+ votes
9y
@Shea Spinelli some of the information you have gotten is correct in a sense but could be mis-understood.
Yes you do sign you own name, however you sign in the capacity of someone with the authority to sign for the LLC. So I would sign;
Ned Carey, Managing Member, Crab Properties LLC.
Where I wrote "managing Member" that could be any title, president, manger, member. However a good title company will want to see your operating agreement to make sure that you have the authority to sign on behalf of the company and in what capacity.
Sometimes the company name is already printed beneath the signature lien. I would then sign my name, comma, official title
The reason is someone could argue that you were signing personally if you don't add your title and company name to the signature area.
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Shea SpinelliPro Member
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Rental Property Investor · Tyler, TX · Member since 2016 · 198 posts · 89 votes
9y
@Jessica Zolotorofe our lawyer told us in Texas, both of us could be on a single member LLC as Managing Members.
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Shea SpinelliPro Member
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Rental Property Investor · Tyler, TX · Member since 2016 · 198 posts · 89 votes
9y
Ok. Thanks @Ned Carey - mine would then be:
Shea Spinelli, Managing Member, Spinelli REI Holdings, LLC
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Jessica Zolotorofe
Attorney · NJ · Member since 2016 · 1k+ posts · 794 votes
9y
that doesn't make sense. By it's very definition a MEMBER has to be a member... 2 members is more than a single member. It doesn't work. I would talk to your lawyer again. Maybe there was a misunderstanding. I hope so anyway! You can have non-member managers, but you can't have 2 members in a single member LLC. Who is the single member supposed to be?
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Shea SpinelliPro Member
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Rental Property Investor · Tyler, TX · Member since 2016 · 198 posts · 89 votes
9y
Jessica Zolotorofe it's a community property state. I interviewed a couple lawyers before deciding. Our CPA said we could both be on it and still be a single member LLC due to the laws in Texas. On the IRS website, when I applied for our EIN it defaulted to a single member too. I feel confident with that portion even though I'm a newbie.
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Greg H.Pro Member
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Broker/Flipper · Austin, TX · Member since 2013 · 4k+ posts · 4k+ votes
9y
@Shea Spinelli
How the IRS looks at it matters zero in this equation. They could care less whether there was 50 members is a single member LLC as long as they get paid
The key is whether you will be able to sell a property with this configuration. The title company is going to want to see your articles and their underwriter will make the final decision. My guess is this will not fly as single member(which I am) is by definition just that. Community property laws in Texas are moot as well as it makes zero difference who signed , owns or who's LLC it is.... the spouse's interest is still protected
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Jessica Zolotorofe
Attorney · NJ · Member since 2016 · 1k+ posts · 794 votes
9y
Yes, it is recognized by the IRS ONLY for taxation purposes as a single member LLC, but as far as the actual practicality and day to day operations of the company, there are two members, not a single member. Your operating agreement should dictate who can sign, but likelihood is that either of you can, and the signature block I put in my post above is still what it should look like. Instead of manager you can say "managing member" if that's the designation assigned in the OA. If you have an attorney who formed this entity, though, asking him or her is probably the best way to go.
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Shea SpinelliPro Member
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Rental Property Investor · Tyler, TX · Member since 2016 · 198 posts · 89 votes
9y
Greg H. And Jessica Zolotorofe I made sure to go with a well established real estate attorney here in town to form this entity. I'm new, but that's why I paid a professional instead of winging it on my own. I see that you both have a lot of experience and Jessica Zolotorofe you're an attorney. I'll definitely be talking to my attorney again after these conversations. Thank you both for your input. After speaking with him I'll update you on his stance. Maybe I made a mistake somewhere...
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Jessica Zolotorofe
Attorney · NJ · Member since 2016 · 1k+ posts · 794 votes
9y
I don't think you made a mistake. Sounds like you did everything right, there was just a disconnect in our communication. The single member LLC comcept in this case is really only for taxation purposes. Community property states see you essentially as one person because all of your property is owned by both of you jointly. Single member LLCs in non-community property states, that really have one single member, are considered "disregarded entities" by the IRS (taxes flow straight down to the sole member's return), all it means by calling you a SMLLC is that the IRS will still consider the entity disregarded because of the community property laws.
But, your original question was about signing. Whether it's a single member or otherwise, you still never use your personal name or names. In your case, there are, practically speaking, 2 members, each granted the management duties for the entity, so a signature block should indicate just that, but always ", Managing Member" not in your individual capacity or you lose the very protections you probably sought by forming an LLC to begin with.
Hope that helps some!
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Shea SpinelliPro Member
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Rental Property Investor · Tyler, TX · Member since 2016 · 198 posts · 89 votes
9y
Communication is the toughest thing we do as human beings Jessica Zolotorofe I see what you're saying and that makes me feel better. All of the things you stated about the disregarded entity and taxation, protections is what I researched with my lawyer and CPA prior to moving forward with the establishment of the LLC. I did receive an email from my lawyer this morning. He said make sure I sign with the Managing Member title, like what Ned had above.
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Jessica Zolotorofe
Attorney · NJ · Member since 2016 · 1k+ posts · 794 votes
9y
Exactly right. Best of luck!
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Steve Vaughan
Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
9y
To better attain the asset protection you seek (?) (and anonymity helps as well) I would not have my name in the name of the LLC. Mine are related to the address of the commercial apt building or something you mighta kinda heard of but can't quite place it.
Whether you signed personally or not, with your last name in it, you will be seen as 'the man'! I like being the guy that has a little bit of authority, but not enough where the buck obviously stops with me.
I've enjoyed this thread and learned a thing a two. What is the purpose of this business? Just curious.
Thank you @Shea Spinelli, @Jessica Zolotorofe and @Ned Carey!
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Shea SpinelliPro Member
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Rental Property Investor · Tyler, TX · Member since 2016 · 198 posts · 89 votes
9y
Steve Vaughan I'm going to use a DBA for the tenants at this location. You brought up some good points. They won't see my last name on the business name. My wife and I are purchasing a 2 acre, 12 unit complex that should either close July 1 or Aug 1. I want to take ownership on the 1st for a clean transition.
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Steve Vaughan
Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
9y
Originally posted by @Shea Spinelli:

Steve Vaughan I'm going to use a DBA for the tenants at this location. You brought up some good points. They won't see my last name on the business name. My wife and I are purchasing a 2 acre, 12 unit complex that should either close July 1 or Aug 1. I want to take ownership on the 1st for a clean transition.
Ok gotcha. Early on I established a mgt co for my portfolio (an s-corp) with a kinda maybe heard of it name. All rents, applications, business cards and tenant interactions run through my mgt co. I'm the 'Regional Manager'. Has worked very well for me, especially as you grow. Glad to hear you are actually placing a commercial asset inside a business entity vs a little house with debt. Best wishes with this asset!
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
9y
what your worried or talking about is the actual clsoing docs
your question was the purchase contract. the purchase contract is not public information.
you can sign any way U want.. then in the vesting portion of the purchase contract put the name of the LLC... then the title co.. or closing attorney will ask for copy of your LLC.. and they will create the signature block to correctly correspond with your LLC..
don't sweat the purchase contract.. no one is going to see it except for your closer.
Notes are generally not notarized its the deed of trust or mortgage which ever they use.. and of course all the title co.. docs to indemnify them.. and none of those are public record as well.
don't get so worried about this stuff ... its over kill most of the time.
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Shea SpinelliPro Member
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Rental Property Investor · Tyler, TX · Member since 2016 · 198 posts · 89 votes
9y
Steve Vaughan that's a great idea! The separation is great - I may look into that as we grow. Thank you for sharing.
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Shea SpinelliPro Member
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Rental Property Investor · Tyler, TX · Member since 2016 · 198 posts · 89 votes
9y
Jay Hinrichs thanks for the info and the nudge. As we are getting closer, I start to drag my feet.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
9y
YUP.... been doing this for 40 plus years.. unless your paranoid of anyone knowing who you are.. tenants ( unless your a full blown slumlord) just do not create issues that your going to be sued for and thats what insurance is for. go forth and do your deal...
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