What are principle owners’ responsibilities of a corporation’s debt if the corporation goes out of business and is broke?

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What are principle owners’ responsibilities of a corporation’s debt if the corporation goes out of business and is broke?

Asked on May 25, 2013 under Business Law, Missouri

Answers:

MD, Member, California Bar / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

It depends on if there is any ultra vires activity and if the creditors can pierce the corporate veil and go after the principal owners directly. It depends on how the income was taken in and the debt taken out. The best approach is to discuss with a corporate attorney or wait until and if you are contacted in a lawsuit for collection.


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