As a silent partner in a flip, am I personally liable for a lawsuit filed against the partnership for the property?
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
As a silent partner in a flip, am I personally liable for a lawsuit filed against the partnership for the property?
I was part of a silent investor in a group that funded project for an existing LLC with no written
agreement for the silent partners role in funding the project. The project completed with a
positive return, and the silent partners were paid out. Over a year after project completion, suit was filed over an alleged plumbing / permit issue, and the case was settled. The LLC is now coming back to the investor group to cover legal fees and settlement cost. Am I legally
required to pay the LLC what they are requesting?
Asked on March 25, 2018 under Business Law, Virginia
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 6 years ago | Contributor
If the partnership was a general partnership, whether you were a "silent" partner or not, you would be liable: all partners in a general partnership are liable if the partnership is liable. If you were a limited partner in a limited partnership, you would not be personally liable. If you partnership had no documents establishing or defining it, it would be a general partnership: a limited partnership must be specifically set up as one.
IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.