Be very careful when causing your LLC to sign a contract. The failure to properly configure the signature block could create personal liability for the person who is signing on behalf of the LLC.
Suppose your LLC is to be the tenant on a real property lease. The landlord’s lease has a signature block that indicates that Homer Simpson will sign the lease as the manager and as a member of the LLC. The signature block looks like this:
World Wide Widgets, LLC, an Arizona limited liability company
By:_______________________________
Homer Simpson, Manager and Member
If Homer signs the contract he and the LLC will be personally liable under the lease.
If Homer signs the contract with the signature block as indicated above the landlord will claim that Homer signed the contract in his capacity as the manager of the LLC AND in his individual capacity as a member.
Arizona LLC law says that a member does have have the legal power to sign a contract and bind the Arizona LLC on legal obligations. Therefore the text “and Member” can only mean the signer is signing in his or her individual capacity.
Bottom Line: If you do not want to be liable for obligations under a contract, make sure the signature line/block shows that you are signing only on behalf of the LLC. The signature block should be one of the following:
If the LLC is member managed:
World Wide Widgets, LLC, an Arizona limited liability company
By:_______________________________
Homer Simpson, Member
If the LLC is manager managed:
World Wide Widgets, LLC, an Arizona limited liability company
By:_______________________________
Homer Simpson, Manager
If the LLC is manager managed and the Manager is a Trust:
World Wide Widgets, LLC, an Arizona limited liability company
By: ___________________________
Homer Simpson as trustee of the Simpson Trust, Manager