CORPORATE TRANSACTIONS & COMPLIANCE BLOG

Getting Document Signatures Right: It’s Not as Easy as You Think!

By: Teri Mayor, COGENCY GLOBAL INC. on Thu, Dec 21, 2017

Document Signature Types.jpg

“Life is really simple, but we insist on making it complicated.” Confucius                               

When filing corporate documents, you might think that the signature would be a rather simple requirement. An officer, manager or other official representative signs in the appropriate place and you’re done. But there are a number of complexities that make the signature a common cause of rejection. Today, let’s look at the different ways documents can be signed, how the signer is identified and how these can affect the acceptability of the document by the filing office.

Types of Signatures

Original Signature: In this electronic age, not many states require an original signed document anymore. There are, however, still a few that require original signatures on paper forms submitted for filing, including:

  • Alabama
  • Arkansas
  • Maine
  • New Mexico
  • South Dakota
  • Vermont
  • Wyoming

Facsimile/PDF/Scanned Signature: Most states now accept a scanned or faxed copy of a signed document. However, it’s important to avoid re-faxing or re-scanning the document multiple times as it can affect the legibility of the document, which may get rejected for that reason.

Conformed Signature: A conformed signature is a typewritten signature that indicates that the original version of the document has been signed by the appropriate party and is maintained with the records of the company. Several states allow it, including:

  • Connecticut
  • Delaware
  • Florida
  • Nevada
  • New York
  • Utah

In some cases, it’s allowed for certain company types and not others. For example, in Florida an LLC document can have a conformed signature but a corporate document cannot.

The conformed signature must also follow a specific format:

  • /s/ Name of Person who signed the original

Electronic Signature (Docusign): Companies such as Docusign offer the ability to store and electronically attach a signature to a document. Sometimes this will look like a handwritten signature but not always. It usually includes information indicating the document was electronically signed. Because of the newness of the technology, it’s not always a given that a state that accepts a scanned signature will accept an electronic signature. For example, California, Louisiana, Nevada and New Jersey all accept a scanned signature, but won’t accept an electronic signature. As electronic signatures become more common, the number of states that will accept them is likely to increase rapidly.

Party Signing

The rules regarding who can sign a document will vary depending on the state and company type, but generally a document signed by an officer of a corporation, a member or manager of an LLC or a general partner of a limited partnership are acceptable. But, as with the type of signature, complexities abound! 

Authorized Person: Many states allow an authorized person to sign on behalf of a limited liability company for certain documents, such as an Application for Authority that registers it as a foreign company. Determining who can act in this role can be a little tricky. In Delaware, an authorized person can sign any LLC document while in New York, they can sign everything except the Articles of Organization which must be signed by an “Organizer”.

You might be wondering what the definition of an “authorized person” is, and how “authorization” is provided. Delaware law does not define the term. New York does provide a definition (Section 102C), which states that an “’Authorized person’ means a person, whether or not a member, who is authorized by the operating agreement, or otherwise, to act on behalf of a limited liability company or foreign limited liability company.” (Other states may define it differently.)

While the definition doesn’t provide much guidance, the operating agreement may specify who is authorized to act in this capacity for an LLC formed in any state.

Principal of the company is another company: Often, organizational structure means that the sole shareholder of a corporation, member of an LLC or general partner of a limited partnership is another company and the principal of that company must sign. Sometimes the chain may go through three or four companies before there is an individual who can sign on behalf of the company filing the document. In those cases, it is generally important that the full chain is provided.  

In Delaware for example, each company and its relationship must be listed as shown in the following example:

EXAMPLE COMPANY, LP

ABC GROUP HOLDINGS, LP, General Partner

           DEF GROUP HOLDINGS, LP, Its General Partner

                      GHI GROUP HOLDINGS Inc., Its General Partner

                      /s/ Adam Jones

                      President

Note that if the general partner of a limited partnership is another limited partnership, the document must be signed by its general partner. 

California, on the other hand, does not like the Delaware format and prefers the signer to be listed first, in this manner for a filing done for EXAMPLE COMPANY LP:

Joe Johnson, Secretary of ABC Company, Inc., GENERAL PARTNER of EXAMPLE COMPANY LP

Signer Does Not Match State Records: Certain states, such as Illinois, verify that the person or company signing is the same the one they have in their records for that role, and will reject the filing if the office has a different person or company listed as officer, member, manager or general partner. Another issue that sometime arises is that a state will reject a filing if the general partner of a limited partnership is not also authorized to do business in that state.

Specific Title Required: States sometimes have specific rules regarding what title may be used for the signer. For example, in New York a filing for an LLC must be signed by a member, manager or authorized person, and they will not accept a document signed by a president, even if that is the title used by the company.

So you can see that signatures can be anything but simple! In addition to the complexity of a variety of state requirements, this is an area where what is considered acceptable changes relatively quickly with the pace of technology. Ensuring that you understand the rules and requirements in the jurisdiction you are working with can help you avoid rejection as well as the sometimes difficult process of getting the necessary signatures all over again.

This article is provided for informational purposes only and should not be considered, or relied upon, as legal advice.

Topics: Company Formation and Filing Considerations