Which position/post in a LLC should I choose in order not to be responsible for its debts?
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Which position/post in a LLC should I choose in order not to be responsible for its debts?
Perhaps I should sign up some additional documents, that will prevent me from future potential problems? Is it better to choose another position/post? If so, please advise which, as I need to sign all the docs on behalf of the company, but do not want to be responsible for company’s debts or negative balance in a bank.
Asked on November 29, 2011 under Business Law, Florida
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 12 years ago | Contributor
As a general matter, an owner, officer, or employee of an LLC is not responsible for its debts and obligations. There are exceptions, however:
1) If you personally guaranty any loans, debts, or obligations, you will be responsible for them. Owners of small LLC typically have to guaranty loans, for example; someone who has a "business" credit card in his or name is typically responsible for the balance on the card if the company doesn't pay. So do not guaranty anything (read all loan and bank documents carefully to make sure you are not assuming liabilty), and don't have a credit card in your name.
2) If you personally do anything wrongful in the course of your employment, you can be sued personally, as well as the LLC being sued. So if you run into someone while making a delivery or driving to a meeting, or defame someone, you could be sued personally.
3) Certain tax obligations will attach to the responsible member of an LLC--e.g. for payroll and sales taxes. Don't be responsible for taking care of these if you don't want to potentially be responsible for paying them in the event of violations.
4) Similarly, certain labor/payroll law violations could result in personal liability, at least if you knew of the violation (e.g that employees were being cheated on hours)--if you handle payroll, don't "sign off" on any improper actions.
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