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My husband and I own an incorporated company together. He is

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My husband and I own an incorporated company together. He is the only director and I was the bookkeeper and 50% shareholder. We are going through a divorce and as part of the negotiations, I transferred all my shares in the company to him. I have not worked in any capacity for the company for 6 months. I am now being sued personally by a company that we bought promotional items from when we were still together. I had signing authority while working for the company and signed the proof agreeing to the items purchased. Am I personally liable under this civil claim? The company is also named as one of the defendents.
Submitted: 5 years ago.
Category: General
Expert:  Teacher Editor replied 5 years ago.

Linda Roch :

This really depends on how your company was incorporated

Linda Roch :

Usually, companies like yours are incorporated as limited liability corporation.

Linda Roch :

If this was the case, you have no personal liability unless you have used company funds as your own.

Linda Roch :

In many cases, people will sue anyone they can find, but that doesn't mean that the court will let this go through.

Linda Roch :

In cases like yours, most of the time, the company is the only one that can be sued and you cannot be sued personally.

Linda Roch :

So it depends on the type of incorporation and how the funds were handled.

JACUSTOMER-nlt16jq2- : What do you mean if I used company funds as my own?
Linda Roch :

if you didn't separate your funds from company funds

Linda Roch :

Usually, companies that are incorporated have their own bank accounts

Linda Roch :

If you use that account for your personal use as well, it's call commingling funds and then something called lifting the corporate veil can be claimed, which means any protection that you get from incorporating is taken away

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