Can I form an LLC to protectthe business from my personal debt?

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Can I form an LLC to protectthe business from my personal debt?

I owe state/federal taxes, student loan, and other debt. A tax lien has been placed upon me. I am able to begin working part to full time now and have the opportunity to become a partner in a business that will be located in Louisiana. This is vital because it will give me an opportunity to pay off this old debt. My question is, since the state will have to be involved in formation of an LLC and state and federal tax ID numbers will be issued, will I be eligible to go into business and will the LLC business and my partner be protected from my bad debt?

Asked on November 14, 2011 under Business Law, Louisiana

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Good question. If you wish to form a limited liability company or a corporation for a business venture in the future, you can do so and feel somewhat comfortable that the creation of this separate entity would be separate and distinct from any obligations for your prior personal debt and the entity and any members of it will have no liability concerning your prior personal debts.

The entity has to be run independently of your personal day to day business and be properly set up with the given state's secretary of state's office. I suggest that an experienced business attorney be consulted for the formation of the desired entity.


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