If my business is not incorporated or an LLC and I have employees who drive my “company vehicles” everyday and 1 of them was to get into an accident while under the influence, what would happen?

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If my business is not incorporated or an LLC and I have employees who drive my “company vehicles” everyday and 1 of them was to get into an accident while under the influence, what would happen?

What would my company/myself be sued or charged with this? If so, what could I lose? I have a small business.

Asked on January 16, 2016 under Business Law, Texas

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

You--you personally, that is--could be sued for a very great sum of money, and could lose your savings, your house, etc.
Under the law, an at-fault driver--someone driving carelessly or negligently, for example, as somone driving drunk would be--is liable, or financially responsible for any injuries or damage he/she causes. But also, and critical for you, the owner of a vehicle is also liable for the injuries or damage caused by an at-fault driver whom he/she allows to drive.
If the business is not a corporation or LLC and you are the owner, legally, *you* are the business: there is no separate legal entity (the corporation or LLC) but only you. You are responsible for all debts of, or judgments, incurred by the business, since you and the business are one. So if the business owns or leases vehicles, you own or lease them; if you let an employee drive one and he/she gets into an accident while DUI, you can be liable. 
You should form a corporation or LLC (LLC is probably a little better--it involves a bit less paperwork and formalities) for your business and conduct your business through it, transferring ownership of vehicles to it.


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