Personal Liability for Business Debts
As a business owner you may be concerned about your own liability for the debts of your company, especially when considering bankruptcy due to serious financial problems. Understanding the degree of risk you possess in relationship to the success or failure of your business is an essential part of the decision making process and business management, and should always be taken into consideration when evaluating how to address your debts.
At the Russell Van Beustring P.C., our legal team is committed to assisting business owners to manage their debt through whatever means necessary and can help you understand the implications of your business debts and whether or not bankruptcy is an appropriate option for you. To learn more about your rights and legal options, call our Houston business bankruptcy attorneys today at 713-973-6650.
Liability in Various Business Entities
The simplest of business entities offer great rewards and advantages in flexibility and mobility, but also expose the owners to more risk than other forms of business organization. The following are the escalating levels of liability that various business entities expose the owners to:
- Corporations – Owners, or shareholders, are not personally liable for the debts of the corporation.
- Limited Liability Partnership – By carrying a minimum of $100,000 in errors and omissions insurance, all partners in an LLP enjoy limited protection from personal liability for business debts
- Limited Partnership – A limited partnership consists of at least one general partner, who is generally liable for business debts, and at least one limited partner, who enjoys the same limited protection from liability, as partners in an LLP
- General Partnership – A general partnership is a simple business entity in which each partner is personally liable for the debts of the partnership.
- Sole Proprietorship – A sole proprietor is personally liable for all business debts of the company.
Depending on the structure of your company, it may be possible for your business’s creditors to come after you personally if the business’s assets are insufficient to pay its debts. In such a situation, you will need the best legal and most comprehensive help possible.
If you have questions about the status of your own liability with regards to the debts of your business, we can answer your questions, address your concerns, and begin working out a solution that’s best for you if needed. For a no-cost, legal evaluation of your business debt situation as it pertains to personal liability, call an experienced Houston bankruptcy lawyer at the Russell Van Beustring P.C., today at 713-973-6650.