In a corporation with 3 partners, 1of whom is president, who is responsible for the debt?
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In a corporation with 3 partners, 1of whom is president, who is responsible for the debt?
Asked on January 10, 2014 under Business Law, Illinois
Answers:
Anne Brady / Law Office of Anne Brady
Answered 10 years ago | Contributor
Corporations don't have "partners" they have shareholders. A corporation is a separate legal entity that is responsible for its own debts. If one of the shareholders personally guaranteed a debt of the corporation, then s/he will also be personally responsible for said debt. But no individual is going to be personally liable for a corporation's debt simply by virtue of being president of the corporation. That is one of the reasons why businesses are incorporated. There is an exception where a creditor can "pierce the corporate veil" if the corporation is just a sham and the individual and the corporation are in fact one and the same, but that is unusual.
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