Legal Question in Business Law in New Jersey

Corporate Seal not on Lease

A lease for five years was signed by the LLC with the president signing but the corporate seal was ommitted. The business closed after 18 months and the LLC filed bankruptcy. The landlord made a claim which the trustee denied because he said it was ''too late''. The bankruptcy judge told the trustee that the landlord's claim was valid under the bankruptcy code. However, the landlord is now frustrated that no monies were dispersed to him and will sue us PERSONALLY unless we pay him and settle NOW. He is holding his claim that we are not protected because of the corporate seal not being affixed to the lease. We think the trustee mishandled his claim. Our attorney wants us to settle with the landlord ASAP before he files a complaint against us personally. What is the right thing to do? Are we really personally liable here?


Asked on 9/12/07, 9:15 pm

2 Answers from Attorneys
Robert Davies The Davies Law Firm, P.A.

Re: Corporate Seal not on Lease

you are in south Jersey, and too far away, I think, for me to help.

However, let me give you some advice: go see a lawyer. no, simply not stamping the paper with the corporate seal does NOT make you personally liable.

Go see a lawyer.

You can call me if you like, but it sounds like you will need to hire a lawyer to put the brakes on this agressive landlord.

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Answered on 9/12/07, 9:24 pm
John Corbett Corbett Law Firm LLC

Re: Corporate Seal not on Lease

Perhaps your attorney knows something that you have not included in the facts that you presented. Based on what you have said in your question, I don't think that you would have much trouble winning a suit by the landlord. Just don't ignore one if it is filed.

LLCs don't need seals. So long as it is plain from the documents that were signed that the LLC was the lessee and that the person who signed was acting in a representative capacity, personal liability should not attach to any of the LLC members. Unless the landlord has changed, the landlord's actual knowledge counts too.

Whether or not to defend a business-related suit is best thought of as a business decision. If the landlord is willing to settle for less than the cost of raising a defense, perhaps settlement is the proper course. If he wants lots more, a vigorous defense often pays for itself.

See also: http://info.corbettlaw.net/lawguru.htm

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Answered on 9/13/07, 7:59 am


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