What happens if someone sues an LLC?
If someone sues your LLC, a judgment against the LLC could bankrupt your business or deprive it of its assets.
Likewise, as discussed above, if the lawsuit was based on something you did—such as negligently injuring a customer—the plaintiff could go after you personally if the insurance doesn’t cover their damages..
Can I sue my LLC partner?
Most business partnerships are governed by a written partnership agreement or, for limited liability companies (LLCs), an operating agreement. If a partner breaches the terms of the agreement, the non-breaching parties can sue for breach of contract.
Does an LLC really protect you?
Personal Liability for Actions by LLC Co-Owners and Employees. In all states, having an LLC will protect owners from personal liability for any wrongdoing committed by the co-owners or employees of an LLC during the course of business. … But the LLC owners would not be personally liable for that debt.
Can personal assets be lost in an LLC?
Limited liability companies (LLCs) are common ways for real estate owners and developers to hold title to property. … In other words, only an LLC member’s equity investment is usually at risk, not his or her personal assets. However, this does not mean personal liability never exists for the LLC’s debts and liabilities.
What is it called when someone sues the owner of an LLC or corporation personally?
A creditor of the LLC often seeks to use the concept of “piercing the corporate veil” to make an LLC member personally liable for an LLC debt, particularly when the LLC is insolvent and can’t pay its debts.