Ask a Business Lawyer. Get Business Law Questions Answered ASAP.
She can't just sue you personally because she contracted with the corporation and not you. You personally did not owe her anything and you personally are not the proper party in the lawsuit. This is the liability protection that a corporation, as a form of business, offers to the shareholders, directors and officers of the corporation: they cannot be sued in their personal capacity for liabilities of the corporation under normal circumstances.
The only time that is not the rule is when the person suing pierces the corporate veil of liability protection of the corporation. This can only be done where that person proves that the corporation was not really a separate entity from you personally and is merely your alter ego. This can only be proved when you didn't comply with corporate formalities, like maintaining separate books and accounts for cash, etc. If you were taking money straight from the corporation (not salary or dividend distribution) and otherwise commingling funds, then this person would have a good argument to avoid the corporate veil and get to you personally. However, it is generally a quite difficult argument to make and if you kept separate corporate books and maintained separate cash accounts from your personal accounts (and otherwise generally complied with corporate laws and maintained your corporate existence with the secretary of state) you shouldn't have anything to worry about.
I believe I have answered your question. Your accept would be greatly appreciated. Of course, if I can provide clarification concerning your original question, please let me know.
If you have additional questions, I would be happy to assist, but as a courtesy I respectfully XXXXX XXXXX you accept the answer to your first question before asking another.
Thank you for using JustAnswer. Your "accept" (by clicking the green "Accept" button) would be greatly appreciated. Otherwise, neither I nor JustAnswer can be compensated for the time and resources expended.
You understand that your use of or communication on this forum, in any and all ways, is intended for general informational purposes only and shall not constitute and/or be relied upon as legal advice or be construed as creating an attorney-client relationship. Further, you agree not to rely on anything I say and will obtain appropriate legal and or tax advice with an attorney or other professional licensed to practice in the jurisdiction where your legal or other issue arises.
I did maintain sep. books and I did draw a paycheck as any other employee.
She is suing me in small claims court, do I actually need to go to the hearing? Is your answer generally the way the law works in most states. I am in New Jersey.
Yes, this is how the law works in all states. I would definitely go to the hearing and make an oral motion for dismissal based on the fact that you are not the proper defendant party defendant. If you have enough time, I would recommend that you also hire an attorney to file a special appearance and motion to dismiss on that same basis.
DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.
The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).