Can You Sign a Contract With a Fictitious Business Name?
A fictitious business name, also known as “doing business as," DBA or trade name, is a name that a company may use to operate its business. When a company operates under a name that is different than the legal names of its business owners, the name must be registered with the secretary of state in the jurisdiction where the primary business is located. A fictitious business name may be used in the signature portion along with the legal names of individuals or corporations authorized to sign a contract.
A contract is legally binding on both parties to an agreement when the contract includes signatures of individuals that represent each party. Thus, all individuals who intend to enter into a particular contractual arrangement on behalf of an organization must sign the agreement with the legal names of the business.
The legal names may be the actual owners, such as general partners in a partnership business or agents authorized to sign contracts on behalf of the partners. With regard to sole proprietorships, the business owners in a sole proprietorship must sign their legal names to make the contract enforceable. However, a corporation exists separately from its owners or shareholders. Once the articles of incorporation or bylaws are registered with the appropriate state agency, the corporation may enter into contracts with third parties. Individuals authorized to sign contracts on behalf of a corporation may sign the agreement using the legal name of the corporation. Other business structures, including limited partnerships and limited liability companies, must also be registered with the secretary of state. The legal names of these businesses are the names registered with the secretary of state.
A fictitious business name may be placed after the legal name of the individual authorized to sign the agreement or the legal name of the corporation or other state-registered entity. Including the fictitious business name with the legal names provides notice to all interested individuals that a company operates under a separate name than the legal names of its owners. A corporation and other registered companies may also have “doing business as” names that are different than their legal names.
There are several formats that companies may use to sign a contract to make the contract legally binding on both parties. For instance, after signing the legal names, include a comma; after the comma, an individual may place the phrase that represents a fictitious business name, such as DBA or “doing business as,” and include the fictitious business name. Whether the individual signing the contract includes the fictitious business name or not, the individual must sign the legal name of the business.