Thursday, December 20, 2012

LLCs: do you always need to add the word “LLC” to your company name?

When filing the articles of organization for a limited liability company, the company owners are required to add to the company’s name words such as “LLC”, “L.L.C.” or a “Limited Liability Company”. Often, for marketing purposes, these words are omitted when the company name appears in advertisements, on the business cards or on the website.

Omitting the word “LLC” or its equivalent from a limited liability company’s name may have unintended consequences for the company’s members and managers. If it is not clear that there is a company with limited liability, courts may find that the members have entered into a transaction in individual capacity, and not on behalf of their company. This may result in personal liability for the members and/or managers.

It is advisable to keep the word “LLC” at the end of a limited liability company’s name even on business cards, in advertising or on the website because the word “LLC” indicates the existence of a corporate entity that provides limited liability protection to its members. Additionally, when entering into contracts, members or managers need to sign on behalf of the company as agents for the company and not as individuals.

This article is not a legal advice, and was written for general informational purposes only.  If you have questions or comments about the article or are interested in learning more about this topic, feel free to contact its author, Arina Shulga.  Ms. Shulga is the founder of Shulga Law Firm, P.C., a New York-based boutique law firm specializing in advising individual and corporate clients on aspects of business, corporate, securities, and intellectual property law.

1 comment:

  1. If somebody writes a contract for their business but doesn't put LLC after their trade name, is this illegal? Could it make the contract void?