Can a creditor come after an LLC owner after the LLC has been closed down?

I closed my business 10 months ago and I did that through the the state and the IRS. Now I have a company that says I owe them $6,000 for unpaid debt. My company closed with 0, we couldn’t survive at all. I am trying to make it after shutting my business down and have 0 available to pay the debt. Any advice?

Asked on August 23, 2016 under Business Law, Washington

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 4 years ago | Contributor

As a general matter, no: a member (i.e. owner) of an LLC is not liable for the debts or obligations of his LLC--that's the whole point of  limited liability company: it limits members' liability.
There are, of course, exceptions:
1) Not applicable here, but certain tax debts (the fiduciary taxes, like payroll withholding and sales tax) for which the responsible member can be held liable.
2) Anything you signed a personal guaranty for--the guaranty is enforceable against you.
3) A "business" credit card issued in your name: the fact that the business is also listed on the card does typically does not make the credit card any less your debt.
4) If you *personally* wronged or damaged a person, even during the course of business, such as by driving a company vehicle into someone, committing fraud (lying to them to get them to do something), defaming someone, etc.
5) IF the creditor can show that the LLC was basically a do-nothing sham or shell, and/or that you did not maintain a meaningful distinction between LLC and personal funds/accounts, but rather just used the LLC as a dodge or artiface to avoid creditors even though it did not have any meaningful existence. In this case, the creditor may be able to "pierce the corporate veil" and get at you personally. This rarely is successful, but is a possibility if the facts support it.


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