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Richard
Richard, Attorney
Category: Business Law
Satisfied Customers: 53972
Experience:  32 years of experience practicing law and a businessman.
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Are we personally responsible for debts of a business partnership

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Are we personally responsible for debts of a business partnership that we are a 50% owner of via an LLC or S CORP?

Welcome! My goal is to do my very best to understand your situation and to provide a full and complete answer for you.

Good morning. You are not unless you specifically personally guaranteed a particular debt. Otherwise, both LLC's and SCorp's are limited liability entities and a creditor to such an entity can only look to the assets of the entity for the payment of such debt.



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Richard and 6 other Business Law Specialists are ready to help you
Customer: replied 4 years ago.

Can a creditor seek payment from us personally (without having our personal guarranty) from "peircing the corporate veil"? What does that mean?
Not if you have respected the entity as its own entity. They can only "pierce the corporation veil" which is a concept that a creditor would try to show that you are not treating the entity as a separate and distinct entity; rather, you are paying entity debts with personal funds and vice versa. It's a high burden for a creditor to overcome.

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