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Reginald L. Snyder

Reginald Snyder’s Answers

1 total

  • Can I be held personally liable for a company expense as a non-owner/director?

    I rented a car, for company business, and charged the rental to a direct bill account opened by the company. As the required guarantee, a company credit card was presented. The company has since filed for bankruptcy and the rental car firm is at...

    Reginald’s Answer

    You probably cannot be held personally liable for this business-related, company expense. When you signed the rental agreement, you were acting as an agent of the now bankrupt company because you were renting the car in your official capacity as an employee of the company and for the purpose of conducting company business. As an agent of the company, the company is liable for your actions UNLESS your actions were "outside the scope" of your apparent or actual authority to act on the behalf of the company. In this instance, based on the facts you've presented, you appear to have been acting within the scope of your authority as an emplolyee of the company when you signed the rental car agreement, charged it to the company's direct bill account, and presented a company credit card for the security deposit. Moreover, even if the agreement states you will be held personally responsible for the charge if the company fails to pay, you still have a very good defense that the company, not you, should not be liable for the expense because you were acting within the scope of your authority as an agent of the company, and you should therefore not be held personally liable for the expense.

    Finally, you should have a contract attorney review the rental car agreement to determine if there are any provisions that indicate you will be held personally liable if the company fails to pay.

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