If I own stock in a smallC-corporation, do I have any personal liabilities if the corporation is sued or looses and court judgement?

UPDATED: Oct 14, 2011

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If I own stock in a smallC-corporation, do I have any personal liabilities if the corporation is sued or looses and court judgement?

Asked on October 14, 2011 under Business Law, New Hampshire


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 11 years ago | Contributor

Many people operate their business out of a corporate entity or a limited liabilty company as a means of minimizing personal liability of the owner of the business. However, just because one's business is a corporation or a limited liability company this does not per se insulate the owner from liability personally.

It is very important that your business has adequate insurance for its operations, that it is adequately capitalized and that you keep your personal and private finances separate and distinct from the finances of the corporate business. Likewise regular meetings of the corporation as stated in its bylaws are a must so as to prevent any claims by creditors that the corporate separateness has been disregarded to create personal liability to the stockholders of the corporation.

With respect to only owning shares in a small C corporation and nothing more, you should have no concerns about personal liability if the corporation is sued or loses a court action resulting in a judgment against it.

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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