California Employment Law
California Employment Law Questions Answered by Legal Experts
Good afternoon Jeff, Thanks for asking for me. Whether you can be held liable for the debts of the corporation, as an officer of the corporation is impossible for me to answer here. Suffice it to say that the answer is yes, you can be under very limited circumstances. Those circumstances are fact-intensive and often can take months to ferret out the information in litigation to answer that question. The only time you would be personally liable is if the creditor/tax collector could prove that the corporation was a sham, that it was the alter ego of the owner/officers and then it is possible to have personal liability against the owner and officers of the corporation. Here is an article that will give you a general sense of what might and what might not lead to trouble.
As the company is apparently already in big trouble, it is possible that bad things in the past are already fact and cannot be swept under the carpet. However, if mistakes bordering on fraud have never taken place, then you are in a much better position to avoid personal liability. Further, as you are hidden behind not only the employer's corporation, but also your own C-Corp, you have additional protections. In a nutshell, so long as you have not participated in outright fraud in the financial operations of the employer's corporation, then the likelihood of you looking at personal liability are slim---but not utterly inconceivable. You may reply back to me again if you have additional questions, and I will continue to assist you. I wish you the best in your future, Doug
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