Subtitle: 
Always be clear when you are acting on behalf of your business.

For most small businesses, a limited liability company is the best entity to use, in part because LLC owners are personally shielded from the LLC’s liabilities, unlike a sole proprietorship and partnership.  Thus, if an LLC or corporation is ever sued, shareholders and/or LLC members' personal assets are ordinarily protected, and cannot be touched by the lawsuit.  However, failure to observe certain formalities may leave you personally on the hook for your business's liabilities. 

Important Tip Always sign contracts as a representative of your company.

When acting on behalf of your company's behalf, always make it clear to those with whom you deal that you are acting in your capacity as a business representative.  As part of this requirement, be clear that your business is an LLC or corporation (depending on what entity you have selected for your business).  Thus, stationary, business cards, and your website should all reflect that your business is an LLC or corporation.  When signing a contract, always be clear that you are signing in your capacity as a representative of your business.  For example, if your business is an LLC, you should sign a contract as follows:  

[NAME OF YOUR COMPANY, LLC]
By: __________________________________
[Your name and title]

If your business is a corporation, then include the notation “Inc.” after the name of your company instead of “LLC.” 

This rule rests upon Colorado agency law, which holds that an agent (business representative) is liable on a contract entered into on behalf of a principal (the corporation or LLC) if the principal is not fully disclosed.  Colorado courts have held that whether a principal has been fully disclosed is a question of fact and will be decided on a case-by-case basis, which means there is significant room for interpretation by a jury.  So err on the side of caution and take these simple steps to ensure that you disclose when you are acting on behalf of your business. 

 

Additional Information
Important Tip: 
Always sign contracts as a representative of your company.
Marketing copy: 
complying with startup legal issues