If I had an LLC that closed, can I be sued personally?

When I opened the business my lawyer at the time told me to sign everything with my name followed by Mgr. and then the companies name. I never signed anything personally that pertained to the business. Now the creditor’s are threatening to sue me.

Asked on June 16, 2014 under Business Law, Oklahoma

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

If you did not personally guaranty anything, you should only be subject to suit for or if:

1) Wrongful acts (torts) committed by you personally; e.g. if you were driving the company car or van for business and hit someone, you can be sued as the at-fault driver, even though you'd not be subject to suit simply for being an owner of the business.

2) Contracts where you were the named party in the contract. In other words, say that your name is John Doe, and you signed a lease for either equipment or office space where the lease states it is between "XYZ Corporation ("Lessor") and John Doe ("Lessee")...." In that case, regardless of how you signed your signature, you were personally named as one of the parties to the contract, and are liable therefore.

3) "Business" credit cards issued in your name--it may be that your company is/was supposed to reimburse you, but if the credit card was in your name, you were the debtor.

4) Certain tax liability (e.g. sales tax, withholding on payroll), where the responsible officer/manager is liable under the law.

5) If the creditors can "pierce the corporate veil" (same term is used for LLCs as for corporations) and show that the company was a sham, used to try to defraud creditors, and not a "real business"--e.g. you comingled your own and the company's money, the company paid your personal (not busines) expenses, and you otherwise did not keep any meaningful division between yourself and the LLC. This is a tough or difficult thing to prove, but not impossible.

6) And if you did guaranty anything, you'd be liable on the guaranty.


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