what’s In A Name – Just Your Business Survival!

What’s so important about how I sign my name?”

I get asked that question all of the time from my business consulting clients.

I tell them that a better question to ask me is this:

“Who cares about how I sign my name?”

The answer is a simple one.

NOBODY.

FINE PRINT: Except… your customers and clients, your creditors, your bank, your mortgage company, your landlord, the I.R.S… oh yes… and anyone else that wants to SUE YOU (and don’t forget ALL their lawyers!).

As in many areas of the law, the exception to the rule swallows up the rule!

What do I mean by this?

Well, let’s start with some basics. For instance, if you’ve already formed a corporation or limited liability company (LLC), you may think that you’re already protected from personal liability in the event of a lawsuit against your business.

In general, the rule is that a corporation or LLC, if formed correctly, and if all of the formalities required under the law of the State where the entity was formed are followed, does protect you from personal liability for business debts and lawsuits.

FINE PRINT: Except… when you choose to do business as an individual, and not as the corporation or LLC that you initially formed.

You see, whenever you sign documents like contracts, purchase orders, contractual agreements, leases, loans, mortgages, promissory notes, and most other legal documents involving your business, you need to make sure that you sign your name only in your business capacity.

You MUST avoid signing your name in your individual capacity.

And how do you do that? It’s pretty simple. You see, the format that you use to sign your name is the controlling factor.

In many cases, you as the business owner, sign your name without knowing how to properly sign your name to business documents. In fact, most business owners of corporations and LLC’s still sign legally binding agreements in their individual capacity…and not as the business.

SIGN AS AN AGENT OF YOUR BUSINESS

If you have formed a corporation or an LLC, you must remember to sign all contracts, agreements, invoices, etc… as an agent of the business.

For example… Many business owners haphazardly, or perhaps inadvertently, sign legal documents like the format shown in

EXAMPLE 1 below:

EXAMPLE 1

(signature)
————————
John Doe

“But what is the consequence of signing my name like in EXAMPLE 1 above to invoices, agreements, or documents?”

EXAMPLE 1 and the above signature format legally establishes that YOU have signed the contract, invoice, loan, or agreement as an individual.

And not as an agent on behalf of your business.

If you sign your name to agreements in the form depicted in EXAMPLE 1 above, YOU could very well be liable personally to meet all of the terms of the agreement.

And you likely don’t want to do this!

Why Simply out, because you’re therefore subjecting all of your business assets and personal assets as well to the risk of a lawsuit.

If you sign agreements as depicted in EXAMPLE 1 above, YOU will very likely be named personally, as well as your business, in any lawsuit filed against the business.

Remember then:

Signing your name like in EXAMPLE 1 above DOES NOT establish that you have signed the agreement as an agent on behalf of your business.

“Okay. So how should I sign my name to my invoices, contracts, leases, loans, or any other business agreements?

What simple step can I take to protect my business, and my personal assets as well?

SIGN DOCUMENTS ONLY AS AN AGENT OF YOUR BUSINESS

Make sure that you only sign legal documents, letters, memos, invoices, loans, leases, etc… as an agent of your business.

How must I sign my name to any legal document or agreement to show that I am signing only as an agent of my business?

Follow EXAMPLE 2 below:

EXAMPLE 2

ABC CORPORATION, INC.

(signature)
———————————–
BY: John Doe
President (Company Title)

If you sign your name on the dotted line following the exact format depicted in Example 2 above, you legally establish that you are only signing as an agent on behalf of the business…and not in your individual capacity.

But you MUST follow the Example 2 precisely.

CAVEAT: Another very important point on this topic.

AVOID SIGNING documents that state “PERSONAL GUARANTY” on them.

A Personal Guaranty is usually a separate legal document attached to the main agreement. You generally see a Personal Guaranty in a loan, mortgage, or lease. However, sometimes a Personal Guaranty can be established just by the way you sign the legal document, invoice, lease, or agreement.

How?

Simple. If the agreement merely has a signature line that has your individual name on it without any reference to your business name, you are signing the document as a Personal Guaranty. You are therefore personally liable for that agreement if you sign the agreement with such a signature line.

But, what do I do if I am being required to sign a Personal Guaranty, like for a business loan or commercial lease for example?

If a Personal Guaranty is required, you or your lawyer should negotiate a limited period of time (the shortest possible) that the Personal Guaranty will bind you as an individual.

Remember, if you formed a corporation or LLC in the first place, you did it to avoid personal liability and to protect your personal assets. Anyone who does business with your company should, and usually does, know this. So, be careful. Other possibilities can be negotiated too. Just do your best not to sign in your personal capacity by signing a Personal Guaranty.

It’s important to remember to only sign legal documents, invoices, and even letters as an agent of your business. (Follow the format found in EXAMPLE 2 above).

How else can I make sure that I am signing my name properly to all of my business documents?

Call your attorney to review all of your agreements, invoices, leases, and legal documents BEFORE you sign them. Your attorney will offer sound advice that protects YOU, your loved ones, and your business.

Now, let’s review.

What’s in a name?

Well… besides your business…

…it could be all of YOUR personal and family assets!

The best advicve especially in the midst of tough economic times or a Recession, is to have any document you sign first reviewed by your lawyer or business consultant.

Copyright (c) 2008. Miguel Mendez, Jr. All rights reserved.

Board Games Booming Business In A Slow Economy

Despite the doom and gloom reports of a poor economy, the board game industry is experiencing tremendous growth. Consumers are turning away from higher priced entertainment options and turning towards the low cost, simple-to-play, and ever so lowly board game for recreation. Games like Monopoly, Uno, and Skipbo are seeing a surge in sales. In fact, the board game industry has seen double digit growth each of the last few years.

The speculation is that board games represent a return to family values. The consumer strapped with cash, may be foregoing dinner out with the family, and skipping the latest movie, but they still crave to spend time together. Where video games tend to be a more isolated form of recreation, board games are a way to enjoy each others company.

The big three board game manufacturers, Milton Bradley, Parker Brothers, and Hasbro dominate the industry and account for much of the $300,000,000 worth of annual sales. But the rules are changing and even small manufacturers are finding a niche. The internet is leveling the playing field and allowing even the newest start ups to find an audience.

Take for example startup game company, Four Clowns Game & Toy Co, LLC out of Scottsdale, Arizona. Founded by four friends who wanted to bring their dice game to the world they have found the internet to be a fast and easy way to gain sales. Diception is the first game launched by the partners and they claim to have a master list they created that contains upwards of three dozen more ideas they would like to introduce.

Other companies have also sprung up to service this growing market. There are now services such Customopoly which allows anyone to create their own version of the all time classic, Monopoly. Another company that is gaining popularity is The Game Crafter. The Game Crafter website (thegamecrafter.com) allows anyone with just a few clicks of the mouse to invent their own board game, have it packaged, and shipped right to their door step. While their prices are not suitable for creating a game that you plan to resell, it is a great and low cost option for creating prototypes.

The Four Clowns Game & Toy Co, co-founder, Larry Shin, stated recently We researched the game industry thoroughly before investing in Diception. What we found is that when the economy is slowing board game sales tend to heat up. Since we are all family men, with children of our own, we wanted to create a game that our kids could play and enjoy right along with the adults. Diception is that game!

Deciding to get into the game business was an easy decision, but finding suppliers who would work with us to create a game was hard. We are nobodies and for the most part, gaming manufacturers want you to commit to huge quantities of games for your initial run. Eventually we did find a solution, but it was a lot of work. Shinn went on to state.

So while the other industries struggle to find business in this ever slowing economy, the board game business is booming. The industry appears to have many more years of increased growth, and companies both big and small are counting on this growth by creating new titles to satisfy the demand. Playing board games has always been fun and looks as though fun has no end in sight.