Table of Contents
Written by : Robert Bemer
Current : 8901
Write a comment
Write a comment
do locs protect against lawsuits this is sam bryant i'm a business attorney with brian taylor law and the answer is no locs do not protect against lawsuits in a general sense i usually tell everyone whether clients or people who are interested in legal services i tell them that anyone can sue anybody for anything the real question is can you be held liable for a lawsuit against you or your llc and by liable i mean can you be in a situation where a judge forces you to pay money to another party as a result of a lawsuit so the answers to that question basically would be it depends um if you have an llc your llc will generally have to be liable for anything that the llc does so if the llc is involved in a lawsuit and the llc loses the llc is responsible for the judgment you as a personal individual that owns the llc in the general context or generally speaking will not be held personally liable for the actions of the llc even if it's involved in a lawsuit am i personally liable i mean that if the llc has to pay a judgment that judgment gets paid out of whatever the llc owns so the llc bank account if you have your own personal bank account and you have your own assets that are not owned by the llc you generally don't have to worry about those personal assets having to take the responsibility of the judgment it's basically whatever the llc owns is subjected to that judgment so if we go back to the original question does do llcs protect against lawsuits they really don't because there really is nothing that can protect you from a lawsuit you can be involved in a lawsuit doing for for any reason it's just a matter of how quickly can you get out of the lawsuit and that will depend on a lot of different circumstances but as a person who owns a business if you are involved in the lawsuit in a sense that your personal name is attached in a lawsuit so you are named as a your individual name is uh included as a defendant in a lawsuit what the llc will do is it will protect against you having to pay a judgment out of your personal assets so again an llc does not protect against lawsuits an llc that is executed and ran correctly will protect your personal assets from being exposed to any judgment against the llc so i hope you found that video helpful if you need to speak to a florida business attorney our contact information is in the description below and then we have a plenty of other videos that can help protect and grow your business
Thanks for your comment Elvis Durnil, have a nice day.
- Robert Bemer, Staff Member
welcome back to LLC MythBusters with your favorite uncle cousin of course and today we're going to be busting myth number three which states and LLC will protect you from lawsuits well that's not entirely true and but to be transparent there's also not entirely false but in order for an LLC to protect its actual owners in order for it to do what everybody think that it does there's a lot of things involved but for the majority of cases where at least for purposes of this myth where people think that oh just because I form an LLC unprotected it don't work like that and for an example I'm going to use a recent court case this court case I do believe uh was just handed down by the jewelry or be given a verdict on October 19th 2022 and this video is be recorded on October 29th 2022 so it's fairly recent and it has to do with a gentleman by the name of Alex Jones Alex Jones is the owner of um free speech Systems LLC and I do believe it's either a separate entity or Free Speech Systems LLC is doing business as Infowars again I'm not quite sure if Free Speech system LLC owns or um so I say if Infowars is a subsidiary of free speech system LLC or is Free Speech lloc doing business and Infowars but in either case Mr Alex Jones was operating under the business of infowars.com where he made some deflammatory comments on the tragedy that happened some years ago where it affected a lot of families um and then a few agents few FBI agents bringing it up today don't want to be before you long he has been ordered you know matter of fact let me just show you the article so here's the article from rudish.com and it says right here um this was posted October 12 2022 but it talks about the legal Fallout from his false Sandy Hook claims and there's a lot to read in here but what I want to point out is is this right here a Connecticut jury on Wednesday ordered him too now notice the key word can we in the courts we want to know who's being responsible the company or the individual it says it ordered Mr Jones himself despite the fact that he was operating under his LLC Free Speech Systems LLC he has been ordered to pay 965 million dollars got that all right let's just look at that now let's go down here as it kind of gives a timeline of events but I'll make sure I'll post a link so you can read this for yourself if you want to get the full details but here is the the breakdown November 2021 right here let's start here a judge presiding over the Connecticut case enters a default judgment against Mr Jones again you got to go back and read the case because he didn't want to give up his financial so they entered a default judgment April of 22 Five Shell entities controlled by Mr Jones filed for bankruptcy protection in Texas which would typically pause all lawsuits against them the case was dismissed in June after the Sandy Hook Parish intervened so I'm just pointing this out to you to let you know that it don't always work the way you think it do fast forward August 5th 2022 the Texas jury find that Jones now here's the thing Jones and Free Speech systems okay so both the LLC and the individual must pay 49.3 million dollars okay and then it again it goes forward here back to where we are on October 12th where kinetic Connecticut jury ordered Jones to pay at least 965 million so as we can see about as you have an LLC does not mean that you the individual are protected and let's put that into perspective 965 million dollars that's close to a billion dollars I read in another article that's probably the highest amount that has been uh charged to an individual in a case like this almost a billion dollars even if it was just on the LLC if you as a single member right like like I showed you in myth number one whatever happens to the LLC is going to affect you do you think that if your LLC had to pay that amount of money that you won't individually be impacted by it and that that was that's again that's just in that instance but we can see from the actual court cases that he himself has been ordered to pay money again referring back to myth number one when I told you that the LLC does not have enough to cover the debt you as an individual are still going to be responsible for it and so I'm telling you this to say hey don't think you're going to get an LLC and be 100 shielded against lawsuits think about that an LLC um cannot represent itself record so you're still going to have to pay lawyer fees you're still going to have to pay the court fees you're still gonna have to miss out on income for the days that you're down there at the court so you're not protected in the way that you think you are now again in the spirit of transparency yes I also have red court cases where llc's did in fact protect the owner but that's because one and this again just based on the court cases I've read the LLC was uh capitalized enough meaning that the LLC had enough of its own money to cover the damages and I didn't get into the financial amount of the damages but I'm just going to say that you know maybe it wasn't that much as to where the LLC could actually soften the blow but let's put that into perspective on the other side if you are a single member LLC and you know you making less than a hundred thousand in net profits if something happens can you take that blow can you withstand that think about it and so if you're getting an LLC with the idea thinking that hey I'm protected legally you might want to reconsider that oh wait wait wait wait wait wait wait wait wait a minute for those individuals who think that hey I'm going to form an LLC in Wyoming or Nevada because they have these privacy laws let me show you something else here is a warning letter from the Federal Trade Commission and the United States Food and Drug Administration but look who it's written to Mr Alex Jones a free speech Systems LLC the reason I'm pointing this out here for those people who think that they can hide from some lawsuit it yes there are certain privacy rights in certain States but it's very very very limited note that the government here simply wrote the letter to Mr Alex e Jones why because he is the owner of free speech Systems LLC DBA where I guess that confirms he's doing a DBA infowars.com so trying to form an LLC in different states because you think you have privacy yes that may protect you from you know a customer but from somebody who has the ability to get information yeah no alrighty family there you have it myth number three busted so for those of you who are thinking of forming an LLC because it provides some legal protection because it isn't better than the name limited liability keep in mind what that word limited really stands for as we saw with uh Alex Jones unfortunately it was limited because it didn't provide a hundred percent protection again something to think about and that's it for this one stay tuned for the next myth that will bust see you there perfect perfect
Thanks endurlifaE your participation is very much appreciated
- Robert Bemer
About the author
I've studied differential topology at Adams State University in Alamosa and I am an expert in biostatistics. I usually feel calm. My previous job was writer /author I held this position for 2 years, I love talking about video game developing and upcycling. Huge fan of Deadmau5 I practice formula 1 and collect dolls.
Try Not to laugh !
Joke resides here...