Signature, as defined under the Uniform Commercial Code, is any symbol that is executed or adopted by a party that presents an intention to authenticate writing. When a business accepts a lot of checks or has many agents accepting checks, a signature stamp is normally used to help deter fraud and speed up the check cashing process. When making a signature stamp a business should be sure to include a recognizable yet difficult to duplicate symbol or signature that they'll use to authenticate checks. The stamp should also include the business name since the check is being deposited into the business account. The business should also be sure to have a limited number of agents that are authorized to sign checks to keep the number of people making deposits down to a limit. This is also done to prevent unauthorized endorsements. By doing so the business will ensure that they do not lose any money or cash and checks that they are not supposed to cash (Clarkson, Miller, & Cross. 2012). .
A fictitious payee is a payee on a negotiable instrument that a drawer has no intention on having an interest in the instrument that is drawn up. A fictitious payee is an entity that does not exist or one that can be identifiable but will not acquire any interest in the instrument drawn up. An innocent holder can hold the maker or even drawer liable on the instrument. A fictitious payee arises when an employee of a company deceives an employer in signing an instrument over to someone that has no right in receiving that payment. Another way a fictitious payee arises is when an agent in the company who is authorized to write checks issues out an instrument on behalf of the company to a party that has no interest in the instrument that was issued. A company should always balance their check books and make sure that whatever they paid for is what they were supposed to pay. A company should also keep track of inventory to make sure they do not purchase unneeded inventory or pay a fake vendor for inventory they never received.