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socrateaser, Attorney
Category: Business Law
Satisfied Customers: 37390
Experience:  Retired (mostly)
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I am perhaps getting my contractor license to work on real

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I am perhaps getting my contractor license to work on real estate my company owns. My municipality only licenses people, not companies. I am worried that even if I do the work under my company name - the company is registered with the state, insured, etc. - that a permit and license in my own name will blast the corporate veil and let liability come home to me personally and not stop with my company.
Submitted: 3 years ago.
Category: Business Law
Expert:  Seattle Scott replied 3 years ago.
Maybe your should re-post under the business law category. That being said, let me see if I can help you. If your plan is that you personally will have to apply for building permits but your company will be entering into contracts with property owners then this should maintain the corp veil as far as construction defects/liability claims go as asserted by your customers. The liability that would arise as a consequence of your name on the permit ,such as a penalty for not renewing the permit if the project was delayed and then construction continued after the permit expired - that type of personal liability would remain. Liability for injuries and physical damages ( not construction defects) caused by your ABC INC. contractor company would be covered under your general liability insurance and liability would not be joint to you personally because you held the permit in your name, when your independent contractor, ABC INC., had its ladder fall onto a child walking on the sidewalk.

If you don't want this answer because it comes from a "family law" attorney, let me know and I will opt out and someone else can help you.
Customer: replied 3 years ago.
Basically since I own the co that owns the property, I own the managenent co and so on...everything is done under llc

thetheres my name on the license and the permit .

bye bye corp veil.

if this is better by a specialist...let me know
Expert:  Seattle Scott replied 3 years ago.
Ok I will bow out, but maybe ask the moderator to switch you over to business law.
Expert:  socrateaser replied 3 years ago.

Different contributor here.. The question hasn't been transferred to business law, but I'm qualified in Family, Business, and practically every other type of legal category. Please permit me to assist.

First, as you're probably already aware, except for municipalities, the state has few regulations concerning contractor licenses (cf, Home Improvement Consumer Protection Act, Crane Operator License, Asbestos Removal License). So, the issue effectively devolves into what the municipality actually requires.

Since your municipality only licenses persons, you cannot hide behind your business entity, regardless of how you try to structure your business. Any liability that would attach to you, while that would not permit a creditor to directly reach your business assets, the creditor could get a "charging order" against the LLC to pay over any profits to the creditor. Then, you would have to decide whether or not to distribute profits.

Pennsylvania law does not permit wage garnishment, so if you were sued and a judgment obtained, you could take your profits as wages and avoid garnishment. So, there are ways to get around a judgment creditor. But, a personal judgment certainly would create problems for you, so the only real solution to your issue of liability is to purchase professional liability insurance that will protect you personally from the cost of legal action -- since you cannot escape liability if your work goes awry.

Concerning the corporate veil itself, Pennsylvania has a "strong presumption against piercing the corporate veil." And, the general rule is that "the corporate veil is properly pierced whenever one in control of a corporation uses that control or corporate assets to further one's own personal interests." College Watercolor Group, 468 Pa. 103, 117

Given your personal interest in a license, and the intent to use that license to repair and improve your business' profits, I can see how it would be quite straight forward to claim that you and your business are "one," for the purposes of any work done by you on your own properties. The legal rationale is called "respondeat superior," and it holds that a business organization is liable for the acts and omissions of its agents done within the scope of agency. And, since you are an agent of your LLC, your LLC would be liable for practically anything you do.

The point is that the corporate veil theory doesn't apply to your purposed activities. "respondeat superior" applies, and your LLC would be easily attacked by a creditor based on this legal theory.

Hope this helps.
socrateaser, Attorney
Category: Business Law
Satisfied Customers: 37390
Experience: Retired (mostly)
socrateaser and other Business Law Specialists are ready to help you
Expert:  socrateaser replied 3 years ago.

Hello again,

I see that you rated my service as "OK." Experience tells me that customers who rate at this level are generally not entirely satisfied with the service received. If you require further clarification or assistance with this question, please let me know and I will try to help.

Note: Please do not reply to this memo, unless you actually have a follow-up question. Otherwise, the system will force me to respond, even if you are simply saying, "no thanks."

Best wishes.

Customer: replied 3 years ago.
I'm sorry, I meant to push higher. Can I edit?
Expert:  socrateaser replied 3 years ago.
Customer service doesn't permit any change to a rating once it is set by the customer.

I was just following up in case you were "on the fence" between satisfaction and dissatisfaction.

If you have a follow-up, feel free to ask. Otherwise, no need to respond. Best wishes.

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