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Legal Person Agreement

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LEGAL PERSON AGREEMENT

This Legal Person Agreement ("Agreement") is entered into as of by and between (hereinafter "Legal Person"), an entity organized as with principal place of business at , and (hereinafter "Counterparty"), an entity organized as with principal place of business at .

RECITALS

WHEREAS, Legal Person is a legally recognized entity capable of holding rights and obligations and is engaged in the business described as ; and

WHEREAS, Counterparty desires to engage Legal Person to act in a representative, contractual, or other capacity as set forth in this Agreement; and

WHEREAS, the parties intend to define their respective rights, duties, and liabilities with respect to such engagement.

NOW THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the parties agree as follows:

1. DEFINITIONS

1.1 "Authority" means the lawful capacity of Legal Person to perform or bind obligations on behalf of itself or another as expressly set forth in this Agreement. 1.2 "Confidential Information" means all non-public information disclosed by one party to the other in any form that is designated confidential or that reasonably should be understood to be confidential.

2. APPOINTMENT AND SCOPE

2.1 Appointment. Counterparty hereby appoints Legal Person, and Legal Person accepts, to perform the services described in Exhibit A attached hereto and incorporated by reference. If no Exhibit A is attached, describe the services below.

2.2 Authority. Legal Person shall have only such authority as is expressly granted in writing by Counterparty. Any delegation of authority to third parties requires prior written consent of Counterparty.

3. REPRESENTATIONS AND WARRANTIES

3.1 Each party represents and warrants that it is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization, that it has the corporate or other power to enter into and perform this Agreement, and that the execution and delivery of this Agreement has been duly authorized.

3.2 Legal Person represents that it will perform services in a professional and workmanlike manner consistent with industry standards and applicable law.

4. CONFIDENTIALITY

4.1 Each party shall hold all Confidential Information in strict confidence and shall not disclose such information to any third party except as required by law or with the prior written consent of the disclosing party. Disclosure to employees, agents or advisors is permitted to the extent necessary and subject to confidentiality obligations at least as protective as those herein.

4.2 The obligations under this Section shall survive termination or expiration of this Agreement for a period of five (5) years, except that trade secrets shall be protected for as long as they remain trade secrets under applicable law.

5. COMPENSATION

5.1 Fees. Counterparty shall pay Legal Person the fees set forth below or on an attached schedule. Fee terms: .

5.2 Taxes and Withholding. Each party shall be responsible for its own taxes arising from this Agreement, except as required by applicable law. Counterparty shall withhold taxes only to the extent required by law and shall provide proof of withholding where applicable.

6. TERM; TERMINATION

6.1 Term. This Agreement shall commence on the Effective Date and shall continue for a term of unless earlier terminated in accordance with this Section.

6.2 Termination for Cause. Either party may terminate this Agreement for material breach by the other party if the breaching party fails to cure such breach within thirty (30) days after receipt of written notice specifying the breach.

6.3 Effect of Termination. Upon termination, Legal Person shall cease performance and promptly deliver to Counterparty all work product and Confidential Information. Termination shall not relieve either party of obligations accrued prior to termination.

7. INDEMNIFICATION; LIMITATION OF LIABILITY

7.1 Indemnification. Each party (Indemnitor) shall indemnify, defend and hold harmless the other party (Indemnitee) from and against any third-party claims, liabilities, losses, damages and expenses (including reasonable attorneys' fees) arising from the Indemnitor's breach of this Agreement, negligence, or willful misconduct.

7.2 Limitation of Liability. Except for liability arising from a party's gross negligence, willful misconduct, or breach of confidentiality or indemnification obligations, neither party shall be liable for consequential, incidental, special or punitive damages, and aggregate liability shall not exceed fees paid under this Agreement in the twelve (12) months preceding the claim.

8. COMPLIANCE WITH LAW; LICENSES

Each party shall comply with all applicable laws, rules and regulations in performing its obligations under this Agreement and shall obtain and maintain all licenses, permits or registrations required to perform its obligations.

9. NOTICES

All notices, requests, consents and other communications required or permitted under this Agreement must be in writing and addressed as follows:

10. AMENDMENT; WAIVER; COUNTERPARTS

10.1 Amendment. No amendment or modification of this Agreement shall be effective unless in writing and signed by authorized representatives of both parties.

10.2 Waiver. No failure or delay by either party in exercising any right shall operate as a waiver of such right, and no single or partial exercise shall preclude other exercises.

10.3 Counterparts. This Agreement may be executed in counterparts, each of which constitutes an original, and all of which constitute one instrument. Signatures delivered by electronic transmission shall be treated as originals.

11. GOVERNING LAW; ENTIRE AGREEMENT; SEVERABILITY

11.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of , without regard to conflict of laws principles.

11.2 Entire Agreement. This Agreement, together with any exhibits or schedules expressly incorporated herein, constitutes the entire agreement between the parties and supersedes all prior and contemporaneous agreements, understandings and communications, whether written or oral, relating to the subject matter hereof.

11.3 Severability. If any provision of this Agreement is held to be invalid or unenforceable, the remaining provisions shall remain in full force and effect to the maximum extent permitted by law.

12. MISCELLANEOUS PROVISIONS

12.1 Assignment. Neither party may assign this Agreement without the prior written consent of the other party, except that either party may assign to an affiliate or in connection with a merger or sale of substantially all assets.

12.2 Independent Contractors. The parties are independent contractors and nothing in this Agreement creates a partnership, joint venture, employer-employee relationship, or agency except as expressly set forth herein.

12.3 Remedies. Except as otherwise provided, remedies provided in this Agreement are cumulative and not exclusive of any remedies provided by law or in equity.

LEGAL PERSON (Party A)

Party Label:

By:

Date:

COUNTERPARTY (Party B)

Party Label:

By:

Date:

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What a Legal Person Agreement Is and When it Applies

A Legal Person Agreement records the authority and obligations of an entity acting as a legal person — for example a corporation, limited liability company, partnership, or trust — to enter transactions, designate authorized signers, and allocate responsibilities. The document identifies the entity, the representative(s) empowered to act, the scope of their authority, effective and termination dates, and the governing law. In U.S. practice the agreement supports downstream processes such as banking, real estate closings, vendor contracting, and regulatory filings, and is commonly paired with officer or resolution language to prove authority.

Why the Legal Person Agreement Matters for Entity Transactions

A clear Legal Person Agreement reduces disputes about who may bind the entity, documents required for third parties, and the applicable law. It supports due diligence, eases onboarding with banks and vendors, and documents limitations or special approvals needed for high-value transactions. Properly drafted, it makes signature attribution and authority verifiable for auditors and regulators.

Why the Legal Person Agreement Matters for Entity Transactions

Typical Organizations and Roles That Use This Agreement

Organizations use Legal Person Agreements when an entity must demonstrate who can sign and what authority they hold; common users span several industries and internal teams.

  • Corporate officers and boards that resolve which officers may execute contracts and financial instruments on the entity's behalf.
  • In-house and outside counsel who draft, review, and maintain authority records for regulatory and litigation readiness.
  • Banks, title companies, and counterparty contracting teams that require documented proof of signing authority before completing transactions.

Maintain a signed, dated copy of the agreement and any board resolutions; ensure signatories match the entity’s official records to avoid later repudiation or operational delays.

Core Elements to Include in a Professional Legal Person Agreement

A robust agreement balances clarity for third parties with internal controls. Include identification, scope, limits, and procedural rules that parties and counterparties will rely on.

Entity Identification

Full legal entity name, jurisdiction of formation, and organizational ID or EIN to avoid ambiguity and ensure matching with filing records.

Authorized Signers

List names and titles of persons authorized to sign, any signing thresholds, and whether signatures may be executed electronically or must be notarized.

Scope of Authority

Specify transaction types, monetary limits, recurring contract authority, and any approvals required from boards or committees.

Effective Terms

State the effective date, duration, renewal conditions, and circumstances that automatically terminate or suspend signing authority.

Governing Law

Identify the governing state law for interpretation and dispute resolution, and whether venue or arbitration is required.

Recordkeeping

Describe retention of signed originals, notices of revocation, and how third parties may rely on the agreement until formally notified otherwise.

Step-by-Step: Prepare and Execute a Legal Person Agreement

Follow these practical steps to prepare, approve, and finalize the agreement so third parties can rely on it without additional verification.

  • 01
    Draft the Agreement: Collect entity formation info and draft authority scope.
  • 02
    Board or Member Approval: Obtain resolution or minute entry authorizing signatories.
  • 03
    Sign and Date: Authorized parties sign, using electronic or wet signatures as required.
  • 04
    Distribute Certified Copies: Provide copies to banks, counterparties, and retain originals.

How Execution and Reliance Typically Flow

Execution and reliance follow a simple routing: prepare, authenticate signers, sign, and distribute authoritative copies to relying parties.

  • Prepare Document: Complete entity and signer fields.
  • Authenticate Signers: Use ID checks or electronic authentication.
  • Execute Signatures: Sign electronically or in-person with notary if required.
  • Provide to Counterparties: Share certified copies for acceptance.

Common Online Configuration Settings

When preparing the agreement in an e-sign platform, configure authentication, templates, and notifications to match risk tolerance and legal requirements.

Field Configuration
Authentication Method Email link, SMS code, or identity verification
Conditional Fields Enable conditional visibility for approvals or limits
Template Library Save standard agreement with prefilled entity data
Notifications Set reminders and completion alerts for stakeholders

Technical and Integration Considerations for eExecution

Choose a platform that supports required authentication, file formats, and integrations so signed agreements are verifiable and accessible.

  • File Formats: PDF, DOCX, HTML
  • Integrations: Salesforce, NetSuite, Microsoft 365
  • Audit Trail: IP, timestamp, and action log

Verify the provider supports your compliance needs (for example HIPAA or 21 CFR Part 11) and can produce a tamper-evident signed PDF and accessible audit trail for recordkeeping.

Typical eSignature Vendor Pricing and Features for This Agreement

Compare basic pricing, trial availability, bulk-send capability, audit trail presence, HIPAA compliance, and envelope caps across common vendors; signNow is listed first per standard comparisons.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day free trial Varies Varies Varies Varies
Bulk Send Yes Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
Envelope Cap No envelope cap 100 envelopes/user/year Varies Varies Varies

Security and Compliance Features to Verify

Encryption: TLS 1.2/1.3 in transit; AES-256 at rest
SOC 2: SOC 2 Type II report available
HIPAA BAA: BAA required for PHI processing
ESIGN / UETA: Compliant with U.S. e-sign laws
21 CFR Part 11: Compliant for regulated industries
Access Controls: Role-based access and audit logs

Key Risks and Potential Penalties of Errors

Incorrect TIN: Backup withholding may apply
Late 1099 Filing: $60–$330 per form
Intentional Disregard: $660+ per form
I-9 Paperwork: $281–$2,789 per violation
Not Notarized: Third-party rejection risk
Improper Authority: Contract voidability or litigation

Common Preparation Mistakes to Avoid

  • Mismatched names between the agreement and formation documents cause banks or counterparties to refuse acceptance and delay transactions by days or weeks.
  • Failing to document board or member resolutions leaves a signing party without verifiable authority and increases the risk of contract repudiation.
  • Not specifying dollar limits or types of permitted transactions creates ambiguity and can expose the entity to unauthorized commitments.
  • Neglecting to update or revoke outdated signer lists after staff turnover causes reliance on unauthorized individuals and potential financial exposure.

Electronic Signature versus Digital Signature: Key Distinctions

Understand the practical difference: 'electronic signature' is a legal category while 'digital signature' denotes a cryptographic method often used where stronger non-repudiation is needed.

Characteristic Electronic Signature Digital Signature
Definition broad electronic process pki-based cryptographic
Legal Status accepted under esign/ueta accepted and cryptographically strong
Common Use contracts, approvals high-assurance regulatory records
Non-repudiation audit trail-based certificate-based

Timing and Filing Deadlines to Keep in Mind

Certain tax and regulatory deadlines intersect with entity authority documents; track these dates to avoid penalties or withholding requirements.

W-9 Provision:

Provide upon request; no fixed filing deadline

1099-NEC:

Due Jan 31 to recipients and IRS

Form 1040:

Individual tax return due April 15

I-9 Retention:

Retain 3 years after hire or 1 year after termination (8 CFR §274a.2)

FBAR:

Due April 15 with automatic extension to Oct 15

Frequently Asked Questions About Legal Person Agreements

Answers to common legal, procedural, and technical questions about preparing, signing, and relying on a Legal Person Agreement in U.S. transactions.


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