What is my personal liability regarding a business run as an LLC?
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What is my personal liability regarding a business run as an LLC?
I am a UK resident thinking of buying a mini-motel in the US. If I buy the property using a LLC and there is an incident which results in a judgement against me which my insurance does not cover, what is to stop the claimant suing me as a person in the UK, as well as the LLC in the US?
Asked on February 8, 2012 under Business Law, New York
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
The owner(s) of a limited liability company are not personally responsible for debts of the company, which includes debts arising out of breach of contract, infringement of intellectual property, or tort (e.g. accidents or negligence). There are some exceptions; the protection, while strong, is not absolute. For example:
1) Obviously, if you personally guaranty a debt, such as a line of credit, or are personally liable on an account, such as for a business credit card, you can be sued personally.
2) If you personally cause an injury, even if you do it in the course of employment, you could be personally sued as tortfeasor in addition to the business being sued. For example, if you run into someone while driving a business car or driving somewhere for business, you could be personally sued.
3) There are a very few type of tax-related debts, such as for payroll taxes, I believe, where the responsible member of the LLC can be held liable as well as the company; I believe that certain violations of wage and hour laws can also result in personal liability for the responsible owner/manager.
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