Q: Are shareholders, directors, & officers of a DE corporation personably liable for unpaid income taxes?

A: No, shareholders are not liable. Not really.

One of the benefits of corporate structure is the limitation of thÿe company's lability. A shareholder will only be "liable" for corporate income tax up the amount of their investment in the company. That invested part represents the amount the Shareholder's loss, if the company failed.

A: In Delaware, shareholders are typically not personally liable for the debts and obligations of the corporation, including unpaid income taxes. This protection is one of the key benefits of incorporating in Delaware. However, directors and officers might face personal liability under certain circumstances, especially if they were responsible for the failure to file tax returns or if there was fraudulent or negligent behavior.

If the corporation has failed to file annual tax returns and reports, Delaware may assess penalties and taxes against the corporation itself. While these corporate debts usually do not transfer to individual shareholders, directors, or officers, it's important to consider any personal guarantees or improper conduct that might expose them to liability.

Given the complexity of tax laws and corporate obligations, you should review the specific circumstances of the case and consider seeking guidance on how to address the unpaid taxes and potential liabilities. Understanding your responsibilities can help you manage the situation effectively and mitigate any personal risk.