Responsibility of a part owner in a dissolved LLC?
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Responsibility of a part owner in a dissolved LLC?
Am I responsible for past due invoices
from a vendor?
Asked on May 31, 2016 under Business Law, Wisconsin
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 8 years ago | Contributor
A part owner ("member" is the better term) is not responsible for any debts or obligations of the LLC unless he or she personally guaranteed them, except as below; so while they can "ask"--anyone can "ask"--for payment, unless these invoices fall into one of the exceptions below, if you did not guaranty them, you are not liable for them.
Exceptions, for which an LLC member can be held liable:
1) Certain "fiduciary" tax debts to the government (sales tax; income tax withholding for employees).
2) If the member did not sign the contract, etc. as a representative of the LLC, but rather signed and incurred the obligation purely in his/her own name.
3) For a "business" credit card in that person's name, since most business cards are really a person's own credit card which has the business's name on it and where the business pays--but the individual remains personally liable.
4) If the creditor can show that the LLC was just a ruse to defraud creditors (e.g. no legitimate business or operations; personal and LLC money co-mingled) and can "pierce the corporate veil"--which is very difficult to do and rare.
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