Once my construction business LLC is dissolved, how long after that can someone bring a lawsuit against me?

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Once my construction business LLC is dissolved, how long after that can someone bring a lawsuit against me?

Also, will I be sued personally or through the LLC if the LLC has no money or assets left? Finally, besides paying my creditors, tax forms and doing an article of dissolution, is there any other important steps I am forgetting?

Asked on April 8, 2011 under Business Law, Pennsylvania

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

1) If the liability was incurred by the LLC (e.g. for a contract it violated, work it did, or negligence it was involved in), then generally the owner cannot be sued personally--even after it is dissolved--with the following exceptions:

a) If the owner himself personally was negligent, he can be sued owing to his own negligence, not as the owner. For example: driving a company truck to a work site, he runs a stop sign and hits someone. Because he was the negligent driver, he could be sued.

b) In *very* rare cases, if a plaintiff or creditor can show that the LLC was prextual--it didn't have a legitimate independent existence, the owner comingled his funds with the LLCs', the whole point of the LLC was to try to shield fraudulent acts by the owner, etc.--then the plaintiff or creditor can "pierce the corporate veil" and sue the owner personally.

c) The owner is liable for any debts he personally guaranteed or typically on "business" credit cards taken out in his own name.

2) You have identified the main steps you need to do. Make sure you keep all records for several years (e.g. 7), and it might not be a bad idea to let vendors and clients know (especially anyone you had standing orders or ongoing work with) know you'll be out of business.


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