If an LLC under a parent company gets sued, can the person sueing the LLC go after the parent company?

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If an LLC under a parent company gets sued, can the person sueing the LLC go after the parent company?

Asked on April 14, 2013 under Business Law, Delaware

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

The whole point of an LLC, or "limited liability company," is that it limits, or reduces/blocks, liability. The owner of an LLC, whether a natural person or another company, is not liable for judgments against or debts/obligations of the LLC, with a few narrow exceptions:

* If the owner guaranteed the debt or obligation in a some contract;

* A few "fiduciary" tax debts, like for sales tax

* If the owner him-, her-, or itself actually did something independently giving rise to liability; for example, if the owner is a natural person and he/she was driving the company car for business and ran someone else over, he or she would be held liable for his/her negligent actions--the liability attaches because of the act the owner did, not because he or she was owner of the LLC.

Apart from the above, no--being able to sue an LLC does not let you sue the owner of the LLC, whether that is a person or a business.


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