If you are part owner of a LLC business and your other partner purchases advertisement signs a contract, who is responsible for the monies owed?
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If you are part owner of a LLC business and your other partner purchases advertisement signs a contract, who is responsible for the monies owed?
The company went out of business. Only one partner signed the contract; the other partner was not notified or aware of it. Now the other party to the contract has summons the partner (who had nothing to do with any of this) to court for payment. How can the debtor collect monies owed from a person who had nothing to do with the contract?
Asked on September 5, 2013 under Business Law, Virginia
Answers:
Nathan Wagner / Law Office of Nathan Wagner
Answered 10 years ago | Contributor
Ordinarily, the members of the LLC would not be personally responsible for the LLC's debts (that is one of the main reasons for creating an LLC). Your partner can enter a contract on behalf of the LLC, and the LLC will be responsible for performing it. Unless there are unusual circumstances here, you are not personally responsible for performing the LLC's contracts.
Maury Beaulier / MinnesotaLawyers.com
Answered 10 years ago | Contributor
The business would be responsible if the membero of the LLC had apparent authority to bind the company to the contract.
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