How can I protect my home from our business if sued?

UPDATED: Sep 3, 2019

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How can I protect my home from our business if sued?

My home is the business address at this time.

Asked on September 3, 2019 under Business Law, California


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

If you haven't already, create an LLC or limited liability company and run the business under it. The owners (called "members") of LLCs are not liable for judgements (e.g. from lawsuits) against it, or its debts and obligations, which means that property you personally own (e.g. the house) is not something someone suing the LLC can get. There are some expections, such as if you comingle or combine LLC and your personal money, since doing so shows that the LLC and you are actually one and the same, so you'll want to set up a separate LLC bank account and only have the LLC directly pay its own expenses and not your personal expenses (as the owner, you can take money out of the LLC--i.e. profit from it--but you'll want to take the money out first, then pay expenses from your own funds or bank account, and not have the LLC directly pay personal bills, debts or expenses).

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 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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