If my wife and I own a small apartment building and the deed is in our name but we manage it through an S-corp, are our assets protected from liability lawsuits by the corporate veil?

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If my wife and I own a small apartment building and the deed is in our name but we manage it through an S-corp, are our assets protected from liability lawsuits by the corporate veil?

Asked on June 19, 2015 under Real Estate Law, New York

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

As long as the corporate veil is sound, yes, your assets should be protected. Do not comingle personal and corporate funds; tracks profit, costs, etc. for yourselves personally and the corporation separately; and generallty treat the S-corp. as a fully legitimate and separate entity. If you do that, and do not personally guaranty anything (like any loans, any credit cards, etc.), you should be safe from corporate debts, obligations, or judgments (i.e. from lawsuits). The exception is if you *personally* do something giving rise to liability; for example, say that while you are installing a window air conditioner in a rental unit, you personally drop it out the window onto a passer-by. You can be sued due to your personal negligence (and the company can be sued, too).


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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