Effect backdating contract

What is not advisable is to date an agreement as being signed on a date that is earlier than the date of actual signing.-To be effective, a retroactive effective date must be allowable under applicable state law.

In some cases, a party might ask to backdate a contract for fraudulent reasons.Therefore, if one is seeking a retroactive effective date for tax purposes, the first requirement is that the document be above board as to what is going on.Thus, showing the true date the agreement is signed, along with an earlier "effective as of" clause, is advisable.For example, if they backdate a contract to show an event happened earlier than it did to avoid tax the backdating is fraudulent.Similarly, the disclosure of any backdating is important because it ensures any future readers are clear on what the document means.

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