As owner of a small business corporation am I responsible personally for debt incured by corporation ?

If you have a properly setup corporation and have not signed personal guarantees and keep your corporate records current and maintain the corporation, you are generally not responsible for the debts of the corporation. There are many factors that can affect your liability and you should discuss your individual circumstances with a lawyer to make sure that you will not be held liable for the corporations debts.


David Goldman
Apple Law Firm PLLC
331 East Monroe Street
Jacksonville, FL 32202

Tel (904) 685-1200 Fax (904) 212-0678

http://www.JacksonvilleLawyer.pro/
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Mr. Goldman is correct. The facts of each scenario heavily affect an individual's liability, however one of the benefits of the corporate entity is limited personal liability. Despite this, if funds are commingled between your individual accounts and corporate accounts or other corporate formalities are disregarded, you may have individual liability for debts that seemingly belong to the corporation.

You should discuss these issues with a corporate lawyer for a full evaluation of your specific situation.

Mark J. Rose, Esq., M.B.A.
www.MarkJRoseLaw.com

You can become personally liabile for employment taxes if they are not properly collected and paid over to the IRS regardless of the corporate form of business. It is very important that employment taxes be properly done and paid.

I agree with Mr. Goldman. But I would clarify that you would be liable for 941 tax liabilities and certain other tax liabilities to federal, state and local tax authorities. You need to make sure these debts are paid first as they will follow you and 941 liabilities (employee withholding) is only 50% dischargeable in bankruptcy.

Also, if you've used your corporation as your personal piggybank and paid personal bills out of the corporate account you will have assumed the company's debts or at least made it easier for creditors to claim that you should be responsible for them personally.

I would schedule a meeting with a lawyer quickly to work through this.

Disclaimer. I am not your lawyer. The information provided is merely for educational use. Contact a lawyer in your state.