Can an LLC and its owner be sued by the same person for the same debt?
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Can an LLC and its owner be sued by the same person for the same debt?
Does the person suing my company, an LLC, have the option of suing me personally and my company in the same lawsuit?
Asked on November 27, 2011 under Business Law, Arizona
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
Typically, IF the debt was incurred by the LLC (e.g. it was for inventory or equipment purchased by the LLC, or on a contract signed b by LLC), the owner is not personally liable. There are some exceptions:
1) If the owner personally guaranteed the debt, such as is required on many loans.
2) If the debt is really that of the owner--e.g. a "business" credit card in your name, when you are the person on the account, who signed the agreement, and to whom the bills are sent (that the company may pay the invoice doesn't make this not your debt).
3) If the debt results from a tort you committed--e.g. if you personally stole from or defrauded a person, were driving the company vehicle that hit someone, etc., you, as well as the LLC, may be sued.
3) Certain tax debts and a few debts from labor law violations attach to the ressponsible managing member of the LLC.
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