Can a creditor come after an LLC owner after the LLC has been closed down?

UPDATED: Sep 30, 2022

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Can a creditor come after an LLC owner after the LLC has been closed down?

I closed my business 10 months ago and I did that through the the state and the IRS. Now I have a company that says I owe them $6,000 for unpaid debt. My company closed with 0, we couldn’t survive at all. I am trying to make it after shutting my business down and have 0 available to pay the debt. Any advice?

Asked on August 23, 2016 under Business Law, Washington


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 6 years ago | Contributor

As a general matter, no: a member (i.e. owner) of an LLC is not liable for the debts or obligations of his LLC--that's the whole point of  limited liability company: it limits members' liability.
There are, of course, exceptions:
1) Not applicable here, but certain tax debts (the fiduciary taxes, like payroll withholding and sales tax) for which the responsible member can be held liable.
2) Anything you signed a personal guaranty for--the guaranty is enforceable against you.
3) A "business" credit card issued in your name: the fact that the business is also listed on the card does typically does not make the credit card any less your debt.
4) If you *personally* wronged or damaged a person, even during the course of business, such as by driving a company vehicle into someone, committing fraud (lying to them to get them to do something), defaming someone, etc.
5) IF the creditor can show that the LLC was basically a do-nothing sham or shell, and/or that you did not maintain a meaningful distinction between LLC and personal funds/accounts, but rather just used the LLC as a dodge or artiface to avoid creditors even though it did not have any meaningful existence. In this case, the creditor may be able to "pierce the corporate veil" and get at you personally. This rarely is successful, but is a possibility if the facts support it.

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 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.

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