If an LLC is sued and I own the LLC, can I be sued as an indiviual?

Asked on September 16, 2012 under Business Law, Tennessee


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

As a general matter, no: the owner (or any member) of an LLC is not liable for the debts or obligations, including those resulting from lawsuits, of the LLC. There are some exceptions, however:

1) If you personally did the wrongful act resulting in the lawsuit, you could be sued for your personal role (for example: you drove the company car that ran someone over; you made defamatory comments about a competitor).

2) If it's liability for a fiduciary tax (e.g. sales tax; certain payroll taxes), as the person at the LLC reponsible (presumably) for paying them, you could be liable.

3) If you personally guaranteed any loans or other debts, you could be liable for those to the extent of your guaranty; in this vein, note that the holders of "business" credit cards are generally liable for them.

4) If it is determined that the LLC is basically a fraud, used to defraud creditors, and doesn't really have an independent existence, then sometimes (very rarely), creditors can "pierce the corporate veil" and hold the owner(s) liable.

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