WHAT ARE THE LIABILITY PROTECTIONS OFFERED BY LIMITED LIABILITY COMPANIES?

By John Kiritsis, Esq., CPA, MBA, MS, JD, LL.M

Kiritsis Law Group

212 922 0005

 

Limited liability companies (LLCs) offer limited liability protection to their owners, also known as "members". This means that members are generally not personally responsible for the debts and obligations of the LLC.

 

In the event that the LLC is sued or incurs debt, the members' personal assets, such as their homes or bank accounts, are typically protected. The members' personal liability is limited to the amount of money or property they have invested in the LLC. This provides a significant advantage over other business structures, such as sole proprietorships or general partnerships, where the owners are personally responsible for the debts and obligations of the business.

 

It's important to note that limited liability protection is not absolute and there are certain circumstances where members may be held personally liable, such as in cases of fraud or illegal activities. Additionally, the specific liability protections offered by LLCs may vary depending on the laws of the state in which the business is located. Consulting with a business attorney or accountant is recommended to determine the extent of liability protection offered by an LLC in a particular state.

 

Sources:

New York Business Corporation Law

New York Limited Liability Company

New York General Obligations Law

NYS Office of Professions

U.S. Constitution

 

Whether you are a new business startup or a well-established company, our law firm can help you with all of your business law legal needs. For a free consultation, you can call us at 212 922 0005.

 

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