In order to avoid personal liability, when a person is acting on behalf of a corporation, it is important that the full and complete corporate name be used. The proper way of signing any document on behalf of a corporation (letter, contract, cheque, etc.) is by printing that corporation’s name and indicating below “by” or “per”, and indicating the title of the person signing underneath the signature. It is however not absolutely necessary to indicate the title.
Nevertheless, it is absolutely essential that the proper corporate name be usedon letterhead, on contracts, on business cards and in advertisements.
Whenever the correct corporate name is used, all persons dealing with that business are deemedto know that they are dealing with an incorporatedbody and that there is no personal liability. If the name usedis not the correct legal name, then the individual signing or incurring an obligation may incur personal liability.
In the case of a numberedcompany or a company, which is carrying on business under a name other than its own, there is a requirement under the Partnership Act that such business name be registered. If such business name is properly registered, then persons dealing with that business are deemedto know that they are dealing with the corporation, which has causedsuch name to be registered, and as such, personal liability will again be avoided.
The law is very strict in this area, and extreme vigilance must be used.