In this space, you may have read about the importance of ensuring the parties you are contracting with know that your company is a separately incorporated company (if it is).

However, if you put the shoe on the other foot, you should also make sure that the party with whom you are contracting is correct and true. There is no foolproof method to verifying the identity of the other party with whom you are contracting but there are a few safeguards that you can perform to make sure you know with whom you are doing business.


1. Perform A Search: Check the appropriate government body — in Ontario, this is the Ministry of Consumer and Business Services — which will give you information about the company including who are the directors, the registered address of the company and in fact whether the corporation is active. This is a fairly simple procedure which is often overlooked and when it comes time to collecting, the creditor can find that the company they were dealing with is defunct.

2. The More You Know: In this day and age of e-commerce and a global economy, you can easily find yourself dealing with an entity that is across an ocean and thousands of miles away. It is prudent for you to do research on the company you are doing business with and it is certainly not considered rude or offensive if you ask the contact individual about their role in the company and who has decision-making authority.

3. Contract: To this end, it is standard to have the following set out at the end of a contract where the parties sign:


  • Per: Signature of individual

  • Name: Printed

  • Position: i.e. President

  • I have authority to bind the Corporation

This may not protect you from fraudulent practices but it shows you have a level of understanding and sophistication and if things go awry, you can rely upon the final statement for backup if you need to prove the contract is binding on the other party. And vice versa.

Jeffrey D. Cowan, B.A., B.Comm, LL.B., M.B.A., is the Principal of Cowan & Taylor, Barristers & Solicitors. Cowan appears in Your Money every other week. E-mail jeff@cowanandtaylor.comor call 416-363-5046 with questions for future columns. The information contained in this article should not be relied upon as legal advice.

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