What will be the consequences if I break an equipment lease?
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What will be the consequences if I break an equipment lease?
My business, a sole proprietorship, has 48 months left on an equipment lease. I plan to close the business and sell my accounts to another printer. After all is said and done taxes, A/P, etc. I will have approximately $5000 left but don’t care; I just want out. The lease is in the business name with me as the person authorized to sign. However, there is no guarantor signature. Can I just call the company and tell them to pick up the equipment? Will I be responsible for the
remaining lease payments?
Asked on May 19, 2016 under Business Law, Illinois
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 7 years ago | Contributor
Was your company an LLC or corporation? If it was, and the agreement was in the company's name, then if you did not guaranty the lease agreement, you are not liable on it: only the business, which you are closing anyway, would be liable. Owners or employees of LLCs and corporations are not responsible for company debts or obligations.
But if your company was a sole proprietorship (not an LLC or corporation), then legally, you and the company are one and the same: you are liable for all company debts, and signing for the business was signing for yourself.
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