Is the individual held liable or is the company held liable for money owed to a customer?
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
Is the individual held liable or is the company held liable for money owed to a customer?
A customer gave money to a company for product then that company filed for dissolution on account of them running out of money. Can the individuals that own said company be held liable to reimburse said customer or are they safe? The company is an S corporation.
Asked on July 5, 2017 under Business Law, Louisiana
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 7 years ago | Contributor
If the company is a corporation of any kind, including a sub-S (or, for that matter, is an LLC), the owners (i.e. the shareholders) are not personally liable for any amounts owed to a customer due to the company violating its obligations to the customer (e.g. taking their money, then not shipping them the product). That is the whole point of a corporation: to shield the owners from liability. The customer can sue the (insolvent or now dissolved company only).
IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.