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hey guys it's Dale with the insurance with your quirky question of the week this week is a question that's for all of our kind of small business owners it's truly a tricky one that all of us think about it has to do with bankruptcy it has the ability the question essentially is am i personally liable for my small business right and that could be a scary subject because if your business goes south god forbid that happens but if it does can your creditors then come after you or any assets that you might have and the answer has to do with how your business is structured right so if you haven't formally structured your company as an LLC or corporation then you're kind of a sole proprietor or you're in a partnership and ownership of that business and in such case in such a case then yes you are personally liable for the debts of that company if you have formally structured a corporation or an LLC then you legally actually have two separate entities right like you have your your personal assets and you have your business assets in such a case then sure the liabilities the debts of the company rests with the company so if the company goes bankrupt then those debts and liabilities fall with the company there is no access to your personal assets from a creditor that being said there are instances especially for small businesses where you may have your company structured as an LLC or corporation but you actively say you know what I'm gonna personally sign this contract or lease in which obviously you become on the hook for said contract or said lease or you may put up a few of your assets as collateral to help grow the business in those cases in those specific cases then then yes those creditors will have a path to your assets but generally if you set up an LLC or corporation then you have legally separated your business from your personal assets and no you are not liable if you are sole proprietor or in a partnership then yes you are I hope that helps remember to send all your key questions to questions at a insurance.com and we'll speak to you next week have a great day
Thanks for your comment Minh Urena, have a nice day.
- Freeda Giaccio, Staff Member
hi this is fresney Amanda Pamela Neiman and right you know when everybody goes into business their goal is to make money and generate a profit but with profits and with income come debts and what happens if your limited liability company can't pay its debts are the members of the LLC responsible well I've tried to address those types of questions those issues on this page read it over when you're done if you have questions I want you to give me a call because not all debts of a limited liability company become the personal responsibility of a member or members I'll alert you to how you should sign for debts I'll urge you on how your LLC should be structured a publicized to third parties and to the consuming public and when you're done you'll walk out knowing exactly when and when not you can be held responsible for the debts of your limited liability company
Thanks believed3 your participation is very much appreciated
- Freeda Giaccio
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I've studied galois geometry at University of the Incarnate Word in San Antonio and I am an expert in ring theory. I usually feel smart. My previous job was historical archivist I held this position for 29 years, I love talking about postcrossing and learn an instrument. Huge fan of Kunal Nayyar I practice ice skating and collect non-sports trading cards.
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