If I have a LLC and terminate my commercial lease early, can I be held personally liable?
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If I have a LLC and terminate my commercial lease early, can I be held personally liable?
I have a kiosk business at a mall and my rent per month is $3500. I have a 2 months lease and my sales are so far for 30 days, $600. My company is LLC and I want to close my business next month and cancel my lease with the mall. Will I be liabale for the debt. It is single owner LLC.
Asked on November 29, 2012 under Real Estate Law, Missouri
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 11 years ago | Contributor
Normally, the owner or a managing member of an LLC would not be liable for the company's debts. The potential risks for you:
1) Make sure you signed the lease in your capacity as an officer or managing member, not personally--if you signed personally, the landlord may be able to hold you personally liable.
2) Obviously, if you signed a personal guaranty to induce the landlord to rent to your business, you can held to it.
3) If you co-mingled personnel and LLC assets, then it is possible--rare, and highly unlikely, but possible--that the landlord could "pierce the corporate veil" and hold you personally liable, under the theory that it is not a real LLC.
Apart from the above, you should not be liable for your LLC's lease obligations.
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