Can the owner of a corp. that is out of business be sued for money
owed?
2006-12-19 06:04:46 · 3 answers · asked by Robert H 1 in Politics & Government ➔ Law & Ethics
Absolutely. There is alot more information I would need to know to give a proper answer but, generally speaking, an individual can be held personally liable for the debts of the corporation if the corporation was underfunded and/or if the corporation was merely a corporation in name only and din't observe any of the corporate formalities such as holding sharholder meetings or distributing dividends and profits. Also, if the owner co-mingled personal funds and corporate funds, that is very bad.
The legal theory is known as "piercing the corporate veil," as to whether the owner can be held personally liable for the debts of the corporation.
2006-12-19 06:15:34 · answer #1 · answered by orzoff 4 · 0⤊ 0⤋
Personal debt yes Debt owed by the corporation no.
2006-12-19 06:10:39 · answer #2 · answered by miraclehand2020 5 · 0⤊ 1⤋
it depends on whether he signed as a guarantee (guarantor) of the original debt.
2006-12-19 06:07:14 · answer #3 · answered by Munya Says: DUH! 7 · 0⤊ 1⤋