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Business Affidavit: What It Is and When to Use It

Simply speaking, an affidavit is a sworn, factual statement committed to paper. It is based on personal knowledge of certain facts or upon a person’s information and belief. A notary public, or someone authorized to administer oaths, generally witnesses an affidavit. Affidavits are typically used in court cases as a reliable source of factual information, but they are also used for a variety of business purposes.

Affidavit Uses

A business affidavit can be used to fulfill a variety of requirements or to officially record information. Some uses include:

  • Financial stability: Presenting a sworn affidavit to a lender or other business partner can demonstrate the business’ financial health
  • Affirmation of assets: An affidavit can serve as proof that a business or business owner is in possession of certain assets, such as inventory or equipment. An affidavit can also outline the extent of these assets and their condition

Different Elements of a Business Affidavit

There is no formal language that must be included in a business affidavit, but here is the recommended information to include:

  • Affiant’s name: The name of the person who is making the sworn statement
  • Affiant’s address
  • Affiant’s signature
  • Information source: If the affiant is making a statement based on information supplied by a source that he or she believes to be true, that source must be noted
  • Date the oath is taken
  • Location where the oath was taken

It is important to note that an affidavit is a legally binding document. All sworn statements should be as truthful and accurate as possible. If the affiant is found to have made any false statements, he or she can be tried for perjury.

Personal vs. Business Affidavits

Affidavits are generally used in court proceedings and are common in divorce cases and estate-planning matters. A business affidavit serves the same purpose – committing a sworn statement of fact to record – but can be created regardless of any legal proceeding. It is a good idea to have a business affidavit on file if you anticipate any possible hiccups with a business partnership, sharing of assets or acquiring a loan. An affidavit can protect you and your business or business partners from a sticky legal situation in the future.

Here are some commonly used affidavits:

  • Affidavit of Heirship: used to establish the heirs of a deceased person; sometimes used to determine the ownership of property if the deceased didn’t leave a will.
  • Small Estate Affidavit: facilitates the probate process for small estates (worth less than $100,000) that don’t warrant the full probate procedure.
  • Witness Affidavit: used to provide a voluntarily sworn statement given by a witness under the penalty of perjury; often used for depositions, interrogatories or any other instance that requires a sworn statement.
  • Financial Affidavit: used when an individual is required to make a sworn statement about the state of their finances; often used for divorce proceedings, child support hearings or bankruptcy proceedings.
  • Affidavit of Service: a sworn affidavit signed by a process server that certifies that court papers have been properly served.
  • Affidavit of Domicile: used to authenticate the last place of residence of a deceased person, which is often required in order to file insurance claims or to transfer assets, stocks or property.
  • Affidavit of Ownership of Business: a sworn statement given by a seller of a business stating that the seller owns a particular business entity; used in the buying and selling of businesses.
 
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