If I open an investment business selling real estate, can someone sue me personally?
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If I open an investment business selling real estate, can someone sue me personally?
I’m thinking about opening a real estate business in FL. I wanted to know how strong the corporate veil is if someone sued me for whatever reason?
Asked on December 20, 2018 under Real Estate Law, Florida
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 6 years ago | Contributor
If you set up a corporation or LLC, the protection is strong, but not absolute:
1) You can be sued for something you personally did, rather than being sued just as an owner or manager of the company. Say, hypothetically, you defraud someone by failing to mention a problem with the real estate--if you (and not an employee of yours) was the one who made the fraudulent statement, you can be personally sued for you own wrongful act.
2) IF you fail to honor the corporation's/LLC's independent existence by comingling its money with personal money (or the money of another business you own), or having the corporation/LLC pay personal expenses for you, that can result in losing the protection and "piercing the corporate veil"--if you don't treat the corporation/LLC as its own, separate entity, you don't get the benefit of it being a separate entity.
3) If you personally guaranty any debts or obligations, you can be sued for those.
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