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.:. Protect Your Assets by Proper Use of Your Business Name

Do you use your personal name, and not the full name of your company, on emails, letters, invoices, bids, contracts and other communications? If you do, you are putting your personal assets at risk … as well as undermining any good asset protection planning you have done in the past.

Also:

For an in-depth look at business owners' exit strategies – from a business lawyer's viewpoint – see Phil Glasscock's Continuing Legal Education outline on Business Succession Planning.

   

Here are some practical tips – some that you may not have considered – for maximizing the utility and safety of email communication:

Whenever I see a business owner sending emails with just their first and last names and no business name, I cringe, knowing that those emails could be used in litigation to strengthen an argument that the sender is doing business personally, not as a separate legal entity. Such a distinction could allow a plaintiff to look beyond your business assets and make a claim against your personal assets as well.

What’s the big deal? The big deal is that to get the protection of having a corporation, limited liability company or similar entity, you must do business as that entity and not personally. Using your personal name in business communication and documentation but not including the full name of your company amounts to doing business personally and not as your legal entity.

What’s “doing business personally”? Doing business personally isn’t limited to using just your first and/or last name; it also could mean that you are using the name of your business but leaving off the entity reference (e.g., “LLC” or “Inc.”). If you limit the identification of your company to a simple trade name (such as “Foster Licensing” instead of “Foster Licensing, LLC,” or “Sahuaro Ventures” instead of “Sahuaro Ventures, Inc.”), you are failing to give proper notice to a business prospect, customer, vendor or – if it comes to that – a judge or jury that your business is incorporated or operating as an LLC.

How do I fix it? If you have a corporation or LLC, always use your full corporate or business name, including “Inc.” or “LLC,” as appropriate. Put your full business name on everything you do related to the business, including emails, contracts, invoices, letterhead, business cards, websites and business social media. If you use your name in a contract or other document, also include your title (e.g., CEO, Member, etc.). Following are some examples:

Where Business Name Right Way Wrong Way
Business Card Foster & Sons, LLC Foster & Sons, LLC
Jay Foster, President
Foster & Sons
Jay Foster, President
Copyright Notice ACME, Inc. Copyright 2011 ACME, Inc. Copyright 2011 ACME
Emails Software Plus, LLC Software Plus, LLC
From Jim Smith, VP
From Jim Smith
Contract ABS Contracting, Inc.

ABS Contracting, Inc.
By _______________
John Doe, Manager

By ____________
John Doe, Manager

What if I am in business but don’t have a corporation or LLC? In our litigious society, doing business without the liability protection and, in many cases, the tax advantages of a separate legal entity is, in most cases, simply foolhardy. Seek professional advice now from an experienced business attorney who can help you reduce needless risk to you and your family.

 
 

J. Phillip Glasscock P.C.

13430 N. Scottsdale Rd., Suite 106

Scottsdale, AZ 85254

480.941.4359 • info@jpglaw.com

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