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 8 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).
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