Can we be sued personally if someone sues our DBA S-corp even though the company has no funds and is about to be dissolved?

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Can we be sued personally if someone sues our DBA S-corp even though the company has no funds and is about to be dissolved?

One of my husband’s customers sent a letter via his attorney threatening legal action if my husband doesn’t finish some repairs. My husband has every intention of completing the job but if the man decides he’s not satisfied and takes legal action, can he go after my hushand or both of us personally since the business is about to be dissolved and has no funds?

Asked on July 29, 2011 Florida

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

If all the business was done, and any agreements signed, as the S-corp rather than as you personally, then you would generally be immune to liability from business dealings. The exceptions would generally be if (1) there was some personal guaranty of the work; (2) if damage is done, or economic loss caused, negligently or intentionally by your husband--i.e. he's the one who personally did the repairs or works--then he potentially could be personally sued as the tortfeasor (the one causing the harm), for his direct role in causing it; or (3) there is some fraud, since in many cases of fraud, especially consummer fraud, corporate officers could be held personally liable.


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