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 13 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.


IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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