In a corporation with 3 partners, 1of whom is president, who is responsible for the debt?

Get Legal Help Today

 Secured with SHA-256 Encryption

In a corporation with 3 partners, 1of whom is president, who is responsible for the debt?

Asked on January 10, 2014 under Business Law, Illinois

Answers:

Anne Brady / Law Office of Anne Brady

Answered 7 years ago | Contributor

Corporations don't have "partners" they have shareholders.  A corporation is a separate legal entity that is responsible for its own debts.  If one of the shareholders personally guaranteed a debt of the corporation, then s/he will also be personally responsible for said debt.  But no individual is going to be personally liable for a corporation's debt simply by virtue of being president of the corporation.  That is one of the reasons why businesses are incorporated.  There is an exception where a creditor can "pierce the corporate veil" if the corporation is just a sham and the individual and the corporation are in fact one and the same, but that is unusual.


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.

Get Legal Help Today

Find the right lawyer for your legal issue.

 Secured with SHA-256 Encryption