Are You Personally Liable for Business Debt?
Small business owners might all have one question in mind: am I personally liable for my business debts?
The answer depends on the structure of their business and how their business was formed. Sole proprietorships, partnerships, limited liability companies, and corporations – different structures have different responsibilities regarding business debts.
If your business is a proprietorship or partnership, you or your partners are liable for any business debts incurred by your business if your business can’t pay its debts.
If your business is a limited liability company or corporation, you are not personally liable for business debts unless you cosign or otherwise personally guarantee the debts.
What Should You Do As Small Business Owners?
As small business owners, seek help from trustworthy and reliable legal counsel to help you protect your own assets and separate your business debts.
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