Suing a limited liability company?

I want to file a small claim against a LLC (home improvement contractor) with a single member/owner. Is he personally liable for any amount?

2 Answers

  • Tom Z
    Lv 7
    1 decade ago
    Favourite answer

    Like shareholders of a corporation, all LLC owners are protected from personal liability for business debts and claims. This means that if the business itself can't pay a creditor -- such as a supplier, a lender, or a landlord -- the creditor cannot legally come after an LLC member's house, car, or other personal possessions.

    Because only LLC assets are used to pay off business debts, LLC owners stand to lose only the money that they've invested in the LLC. This feature is often called "limited liability."

    Exceptions to Limited Liability:

    While LLC owners enjoy limited personal liability for many of their business transactions, this protection is not absolute. This drawback is not unique to LLCs, however -- the same exceptions apply to corporations. An LLC owner can be held personally liable if he or she:

    * personally and directly injures someone

    * personally guarantees a bank loan or a business debt on which the LLC defaults

    * fails to deposit taxes withheld from employees' wages

    * intentionally does something fraudulent, illegal, or reckless that causes harm to the company or to someone else, or

    * treats the LLC as an extension of his or her personal affairs, rather than as a separate legal entity...

    This last exception is the most important. If owners don't treat the LLC as a separate business, a court might decide that the LLC doesn't really exist and find that its owners are really doing business as individuals who are personally liable for their acts.

  • Edith
    Lv 4
    5 years ago

    If the Company is not limited by liability, the members who are the subscribers to the memorandum are liable to repay the entire liabilities. If the company is limited with shares, the members who are the subscribers to the memorandum have to repay upto their limit. Remaining liabilities will be settled by selling of their assets and bills receiveable if any.

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