Q: My wife and I ran a small LLC for five years. Slow sales are forcing us to close in Feb. 2020. In the meantime, FedEx i
We ran a business with best intentions but lost lots of money, and I feel it is wrong for others to sue wy wife who is the CEO while we hoped for some Corporation protection from personal assets. Can we ask the court to remove my wife from the lawsuit and deal with the corporation only? What is the risk if we do not respond to the corporation lawsuit. Also, can we try and what is the outcome if we try to explain in person when my wife's court date arrives.
Thank you very much
Dariusz and Rosalie
A: No your wife is a proper party to the lawsuit. Only a properly set up LLC with 3 members or more will protect you from personal liability. Depending on your overall situation you should retain either an experienced civil litigation or bankruptcy attorney. To determine how you should proceed an in person consultation is necessary.
Ignorance is never bliss in the legal world. The protections to you and your wife as members via the LLC are not unlimited. Courts will “pierce the corporate veil” and allow personal liability to attach to individual members for debts and obligations of the LLC if:
- the LLC was used as an extension of the members personal affairs
- a member was reckless during the course of business that caused harm to the company or to someone else
- or to prevent the LLC from being used to defeat the ends of justice, to perpetrate a fraud, to accomplish a crime, or to otherwise evade the law.
Your case needs the attention of a business litigation lawyer to come up with a good strategy to defend against the lawsuit you are faced with.
Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.
The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.
Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.