I am Matthijs van Gaalen and I'm a corporate / commercial lending lawyer at Gowling WLG.
and you're watching our third video as part of our video series entitled different types of borrowing entities in this video we're going to review sole proprietorships.
In our last video we discussed corporations. A sole proprietor is at the opposite end of the spectrum from a corporation, in that it's the term given to an individual who runs the business in his or her personal name or unincorporated business style without using any other corporate vehicle to do so so acting as a borrower unlike a corporation the sole proprietor is personally liable and is responsible for all the debts liabilities and obligations of their business and as a natural person they have the ability to enter into and transactions and sign documents they don't need other approvals. As part of this process you should obtain copies of their identification ideally their driver's license passport or birth certificate so you can confirm their proper legal name or variations of that so that it's properly listed in the signature block. Also a lender should consider whether they want the signature witnessed as that is a very good practice but not essential.
To recap sole proprietors, first the liability for the sole proprietorship extends to the individual unlike a corporation, second an individual can enter into contracts including loan documents. Third a lender will want to confirm the legal name and the verifications by obtaining identification, Fourth, consider whether you need to have a witness for the signature to strengthen the enforceability this presentation was a high level overview however if you find that you have more specific questions about any of the points discussed or their application to a specific situation please reach out to any member of our lending team and you can also contact me.
Thanks for watching.