Raleigh Personal Liability Lawyer
North Carolina small business owners may choose to operate their businesses as any number of state recognized entities, including corporations and limited liability companies (LLCs). The value in operating a business as one of these entities is that they provided limited liability to the owners. That is, unless there has been some misconduct, a plaintiff typically cannot recover a judgment against the owner’s individual assets. The plaintiff is limited to recovery from the assets of the business.
There are certain circumstances under which a business entities limited liability can be destroyed. If someone has threatened to file suit against you individually or if you need to collect against an individual owner of an undercapitalized entity, contact the civil litigation attorneys of Maginnis Law, PLLC at 919.526.0450 or visit our contact page to submit an email inquiry.
“Piercing the Corporate Veil”
North Carolina allows creditors to proceed against an individual owner by “piercing the corporate veil” of a business. This theory allows creditors to obtain judgments against an individual owner who simply uses his business as an “alter ego” to avoid liability. Evidence that a business owner has left the business “grossly undercapitalized” is strong evidence of an alter ego.
Failure to Remain in Good Standing
If a business is not in good standing with the state, that business is no longer entitled to the corporate protections provided by state law. If there are multiple owners, it will likely be treated as a partnership. If there is one owner, it will be treated as a sole proprietorship. Both designations allow for individual liability.
Businesses in lease agreements or agreements with suppliers/vendors will ask for a personal guarantee. This can expose the individual owner to personal liability and can protect businesses from only have commercial debt collections against a company with little in the way of assets.
Free Consultation and Contingency Fee Structure:
The civil litigation attorneys of Maginnis Law offer free consultations for all cases from Raleigh, Cary, Durham, Chapel Hill, Apex, Clayton, Morrisville, Wake Forest, and the surrounding Triangle area. We are able to operate under a number of different billing arrangements, including hourly, flat fee, and contingency. We will work with you do determine what fee structure best fits your case and your business’s needs.
Contact the firm today at 919.526.0450 or use our contact page to speak with a Raleigh lawyer about your particular personal liability situation.