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Those letters at the end of your business name mean something

You've done the smart thing and set up a corporation, limited liability company, or other entity for your business. You've taken this precaution to avoid personal liability for the business's debts and losses. Hopefully, the business will be wildly successful, and you won't have to worry about such things, but it's always good to be prepared. Now that you've done what's necessary to cover your bases, don't make a simple mistake that could undo that careful planning.

Don't leave off the "Inc.", "LLC", "Co.", or other designation from your business's name in the documentation of your business's transactions.

ABC Cleaning is not the same as ABC Cleaning, LLC. If you lease an office in the name of ABC Cleaning instead of the business's full name, you may have just become personally liable on that lease.

A business entity (the principal) does business through its agent(s). Normally, an agent that enters into a transaction on behalf of its principal is not liable on that transaction-the principal (ABC Cleaning, LLC) is. However, the agent (you) must accurately disclose and name the full identity of your principal at the time of the transaction in the lease document. Otherwise, as in our example, in the event of a default on the lease, the landlord can choose to hold the agent or the business entity liable. This is true even if the landlord later learns of the full name of the business entity and even if you sign as the President (or other title) of ABC Cleaning.

Always do business in the full name of your business entity signing as the agent for the business.

For example:



Joe Smith, its President

Don't let a simple oversight undo the protections you've put in place. When in doubt, consult a trusted attorney to assist you.

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