LLCs and the Law


An LLC is considered by law to be a separate legal entity. That means you, as the owner, aren’t liable for the LLC’s acts or debts, and you can’t be sued personally, or lose anything other than the money or assets you put into the business. This protection covers both Managers and Members.

So can a court ever break through that and find you, as a member or manager personally liable? Yes, but only in some circumstances. For example, if you:

Personally guarantee a debt in the name of the LLC
Commit an illegal or fraudulent act in the name of the LLC, or
Use the LLC to benefit yourself personally, at the expense of the LLC’s members,
Then yes, you could find yourself in trouble and the liability shield may be pierced.

There are many variables when you’re structuring a business. That’s why it’s hard to go through a quick-service website. Unless you talk to someone who’s got some knowledge and experience on both the tax and the legal side, it’s hard to know what you don’t know. And that can leave you vulnerable.

Got questions? Contact us! We’re here for you.

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