As a business owner, you may sometimes feel like you're drowning in paperwork, but some documents are invaluable to have on hand, especially if legal proceedings arise. One such document is an affidavit form.
An affidavit may be required in situations from real estate to loan transactions and, for businesses specifically, it's helpful to know about five affidavit types.
Affidavit basics
An affidavit is a document that the person signing it (“affiant") swears to be true in front of a notary public or other official, such as a judge.
The penalty of perjury applies to any misstatements. Affiants should read and understand all information and be sure that the text is true to the best of their knowledge.
In addition to basic information, including the affiant's name and address, the general affidavit format also provides space for specific details, which vary based on the document's underlying purpose.
Once the affidavit is completed, the affiant must verify their identity with the notary public or state official and swear to the truth of the statement contained within it. Some states permit electronic notarization. In Texas, the affiant must still appear in person to execute the affidavit.
You can find a general affidavit form as well as specific types and state-specific affidavit forms online.
Business affidavits
While all affidavits share similar characteristics, some are especially useful for businesses to keep in case the need arises.
But bear in mind that state law governs the specifics on how to make an affidavit official, so follow your jurisdiction's procedures to ensure compliance.
1. Affidavit of lost promissory note
In loan transactions, a borrower usually provides evidence of the transaction for the lender. When businesses are involved, this document is usually a promissory note, which includes all critical information concerning the loan. If the lender misplaces this note, they don't also lose the ability to collect on the loan. Instead, they must complete an affidavit of lost promissory note.
Having an affidavit of lost promissory note could mean the difference between being able to collect a debt or not.
Also called a “lost note affidavit," this type of affidavit requires that the affiant describe the note in as much detail as possible, including the holder's name, borrower's name, effective date and full value. The affidavit should also include the procedures followed to attempt to find the lost note as well as a declaration that the note hasn't been transferred to a third party and that both parties agree that the note exists.
2. Affidavit of lost document
Similar to a lost note affidavit, an affidavit of lost document is a statement that verifies that a document once in existence cannot now be located; usually the affiant uses this type of affidavit to request a replacement document.
For businesses, an affidavit of lost document may be used when bylaws, meeting minutes or stock certificates go missing, for example.
3. Business records affidavit
When a court requires a business to turn over records through a subpoena, the business must also file a business records affidavit along with the documents. A business records affidavit is the sworn statement of the documents' custodian.
State requirements regarding the type of information contained in business records affidavits vary, and the outcome of court proceedings could depend heavily on how closely the rules are followed. In Florida, for example, the custodian should have knowledge of how records are maintained or collected.
4. Bulk transfer affidavit
If your business is going through bankruptcy, you should compile a bulk transfer affidavit, which lists all of the claims against a business and provides original creditors with the rights to the business's assets.
5. Affidavit of service
An affidavit of service also called “proof of service" verifies that a party in a legal proceeding has received certain documents. This document is signed by the server, swearing that they served the documents to the receiving party.
If your business is involved in a legal matter, you should be sure that, whenever documents are served, you receive an affidavit of service from the server. The affidavit should include the date, time, and manner of service as well the identity of the person served and any other relevant information.
If you are unsure whether you're following proper affidavit protocol, consult a legal professional. Addressing potential problems with sworn statements on the front end is infinitely preferable to dealing with any fallout later.
