I am a Sub contractor and being sued by a huge contractor for something that I think will be thrown out. My Insurance carrier has assigned a lawyer and he is not concerned but, being that this is my first lawsiut, I wonder that if I lose, can they go after me personally or only after the company which is a sub "S" corp.?
I would hate to lose everything I have worked for all of my life to a bunch of money hungry moorons that sue everyone they come in contact with.
2006-10-20 08:28:34 · 5 answers · asked by breeze32461 2 in Politics & Government ➔ Law & Ethics
Your answers made me look again at the original paperwork. It states the company name and me as the reg. agent for the company. I and the President and majority owner. I would just like to sleep alittle better at night !!!
2006-10-20 08:48:04 · update #1
Yes. Corporations are either classifed by "C" or "S". Either way a corporation protects the shareholders, the owners, from liability. However, if he names you personally in the lawsuit in addition to the corporation then you would not be protected. The fact that you are the registered agent only means that you accept all legal paperwork in that state for the corporation.
2006-10-20 08:34:11 · answer #1 · answered by fenocian 2 · 0⤊ 0⤋
A corporation (and an LLC) protect the personal property of the human owners. All the party suing you could get are the business (corporate) assets - NOT yours. Unless you operate your company as a front for your personal assets (don't keep separate books), and they only sue the company, not you personally, then you are probably fine.
The fact that the company is a Sub S is immaterial. A "Sub S" is used for tax purposes only. There is no difference in protection of personal assets of shareholders (owners) for a Sub S or regular company (called a "C corp.).
Call your insurer and ask them to give you the attorney's name so you can talk to him. Be careful, insurance company attorneys work for the insurance company's best interests, not necessarily yours. Find out what the insurance company's attorney wants to do and make sure it will be in your best interest.
2006-10-20 15:42:50 · answer #2 · answered by J T 3 · 1⤊ 0⤋
J T is right. You would be entitled to limited liability unless the plaintiff could "pierce the corporate veil" by showing that you did not respect the corporate entity by not having annual meetings, not keeping the corporation registered with the secretary of state, not keeping separate books and bank accounts, not showing the corporation as the party on contracts. If that is all not true, relax, shut your eyes, sleep well.
2006-10-20 18:05:11 · answer #3 · answered by mattapan26 7 · 0⤊ 0⤋
Absolutely. Because you filed as a corporation, and not a LLC (limited liability company) they can go after your business assets as well as your personal.
In an LLC structure, they can only go after your business assets, not your personal.
if I were you, when this is done, disolve your INC, and reform as an LLC.
2006-10-20 15:31:59 · answer #4 · answered by northyankeefun 3 · 0⤊ 2⤋
http://www.nolo.com/
2006-10-20 15:40:34 · answer #5 · answered by Anonymous · 0⤊ 0⤋