LLC Answers

VIDEO LIBRARY

Wondering whether to start an LLC for your new business?

Many think that if the business will only be owned by one person or if the business is going to be small with very little revenue, then the LLC is not required. To the contrary, this is the wrong thinking that has caused many personal liability problems for others.

Listen to this video by Amyli McDaniel which explains how a prospective business owners should assess whether he or she can benefit from the LLC protection afforded by the limited liability company…. Continue Reading

I have received a lot of inquiries about whether the use of a limited liability company llc shields a person from having to file for personal bankruptcy if the business is failing and has debts it cannot pay.

The answer to this depends on what you have done in your business.  First, if you had decided to form an LLC when you started your business and then transacted all business in the name of the LLC, then the LLC liability limitation provisions protect you from being personally liable for obligations under those business transactions.  For example, if you signed a … Continue Reading

Today, a well know legal professor (expert in business organizations law) filed a brief in a landmark Florida case that addresses a fundamental single member LLC matter. If the court agrees with his position, this could mean the definitive end to any charging order protection for the single member LLC.

State LLC laws have never differentiated between a limited liability company that has one member and one that has multiple members when it comes to liability protection.  It is well recognized that every LLC provides a layer of protection stating that owners are not personally liable for business liabilities merely because … Continue Reading

This is a tricky question because there is always the interplay between the liability protection afforded to an LLC officer under the limited liability company laws and the general law that requires that you be personally accountable for your actions.

Making decisions in a business is difficult.  You need to decide on things when you may not have complete information and you may make decisions that may ultimately prove to not be the best one.  The law acknowledges this and so generally does not hold … Continue Reading

Generally, when this question is asked it is two fold.  One, how are previously purchased equipment or previously incurred debt transferred to a limited liability company when an LLC is created later for a business.

Second, is it possible to not be personally liable for that debt after the transfer?

Question #1:  Yes, you can transfer any assets or debt to your LLC. You transfer assets with a document called a Bill of Sale and you assign debt with an assignment of the debt contract and obligation.  The LLC needs to agree to undertake the debt obligation by having its members formally … Continue Reading

Most business owners create a limited liability company for their business in order to protect their personal selves and their personal assets from the liabilities and obligations of the business.

However, another liability concern relates to what is known as “reverse” liability. If a business owner is sued in his personal capacity for something totally unrelated to his LLC business, is the LLC business protected from being taken over by the person who obtains a judgment against the business owner personally?

The LLC laws of most states contain a “charging order” provision in them which is a great benefit of … Continue Reading

CAN I FORM AN LLC TO GET RID OF EXISTING PERSONAL LIABILITY?

I get inquiries almost daily from people who are dealing with a current problem or lawsuit and they want to know if there is a way for creating an LLC at that point and use the LLC to somehow avoid being liable for the potential liability or lawsuit in question.

The answer to this is always “NO.”  An LLC only exists from the point it is created.  So, if you were to form an LLC today, it did not exist with respect to any business or other activity that … Continue Reading

The biggest reason that a business owner should and would want to use a limited liability company for his or her business is because the LLC provides a layer of protection between the business and the business owners.  What does this mean?

Most people know what it means generally, but they may not be aware of how it applies and when it applies or does not apply.

Every state’s LLC laws have a provision that says something similar to this (legalese): “. . . no member, manager, organizer or agent of a limited liability company shall have any personal obligation for any … Continue Reading