Anyone know a little bit about LLCs (limited liability company)...

SECplayer · Feb 10, 2011

I know one of the purposes of setting up a business as an LLC is that it protects your personal assets from the debts of the company.

However, does anyone know if it also protects you from lawsuits against the business as well?

This is merely a hypothetical question. Just a potential worry from one investor should we decide to proceed in starting a bar/restaurant.

The question is: if someone were to sue the bar/restaurant, could they attack your personal assets as well or would the plaintiff strictly be limited to the business's assets?

I know the easy answer is "talk to a lawyer" and we intend to should we actually decide to go through with it, but just wanted to know this quick question first.

Thanks.

RenoChazz · Feb 10, 2011

you should talk to a Lawyer but I'm pretty sure that they can only sue for the business's assets. That's one of the reasons for registering your business that way.

Defying · Feb 10, 2011

jgrif didnt mention he is a lawyer...

SECplayer · Feb 11, 2011

Thanks guys.

Will still get with an attorney if we actually go through with the plan. Just in the very very initial discussion stages at this point but that question was brought up and was curious.

shdw01 · Feb 11, 2011

I believe an LLC was designed to give the individual owner the same legal protection as that of a corporation (i.e not piercing the corporate veil) without all the complicated and expensive requirement for a corporation (annual minutes, board of directors, separate tax return, etc.)

again, talk to an attorney but it is designed to protect the individual so i'd rest assured that there is little more you can do.

buddyboy · Feb 11, 2011

Generally yes, but anyone can sue anyone. They may not win, but you still have to defend yourself.

also, 9 times out of 10 if you're gonna be doing anything with the business that requires the business to have a line of credit... you're gonna be asked to sign a personal guarantee anyway.

let's say someone gets into a fight in your bar and gets hurt, IF they sue they will sue everyone and anyone they think has $$$$. The Bar, the Bar owners, the person they fought with, the vending company that provided the pool sticks, the servers, the bartender...

set everything up to the HIGHEST LEVEL of protection you can, because you'll need it.