In this recent court decision a person was held personally liable on a bounced cheque made on a business name, a result that was upheld on appeal to the Ontario Court of Appeal. Indeed, the appellate court came to this conclusion is a very terse decision that said Section 131(1) of the Bills of Exchange Act, R.S.C. 1985, c. B-4 (the “BEA”) was a complete answer to the appeal because it specifically mandates that:
“[w]here a person signs a bill in a trade-name or assumed name, he is liable thereon as if he had signed it in his own name.”
In this case, the person appealing signed some cheques under an unregistered trade name and because of section 131(1) of the BEA, he became personally liable on the cheques that failed to clear. As stated by the court, “it is the responsibility of the person signing the instrument to ensure that it properly reflects the name of the corporate entity.” A failure to do so will result in personal liability.
Drive Auto Group Inc. v. David Hay Limited (Fix Auto Richmond Hill), 2022 ONCA 239
https://www.canlii.org/en/on/onca/doc/2022/2022onca239/2022onca239.html