Limits of personal liability for Ohio single-member LLC?

Asked almost 6 years ago - Cincinnati, OH

I have a single member Ohio LLC. My LLC has seperate contracts with clients, bank accounts, and credit cards. I have never paid personal bills using LLC funds directly - I have always either written a check or performed a Electronic Funds Transfer from the LLC's account to my own as a draw.

I have recently received threats of litigation for work performed by my company where I am named personally, not my LLC. Can I be held personally liable for work I performed for the LLC that was paid to the LLC?

My house (titled in my personal name) is the listed mailing address for the LLC. I do not use the house for the business aside from a mailing address. Is my home in danger for a judgment in the event of a lawsuit?

Attorney answers (2)

  1. Kenneth Allyn Sprang

    Contributor Level 15

    Answered . I see from your multiple questions some real concerns about this potential claim and your potential exposure. I think you definitely need legal counsel to help you evaluate the extent of your company's liability, if any.

    As to your questions, if you have kept operation of your LLC separate from personal finances, and if you have reasonably capitalized the LLC, you should be personally insulated against the liability.

    The company will be liable for work it performed, even if you personally did the work, assuming the contract, verbal or written, was between the company and the client. Unless you did something intentionally to harm the client, you should be insulated.

    The fact that your home is the address of the business is not important, so long as the LLC has no interest in your home. If you are married, going forward, you might consider putting your home in your spouse's name, assuming your spouse is not involved in your business.

    Ken Sprang
    ksprang@dcinternationalcounsel.com
    Admitted in OH, PA, MD, DC

  2. Carole Ann Lohr

    Contributor Level 8

    Answered . In determining whether or not personal liability exposure exists for work that you performed on behalf of the LLC a close look at the facts is necessary by an attorney. You should contact an attorney regarding the threats of litigation so that he or she can advise you as to whether or not a complaint could be filed against you personally. If it is possible to resolve the threats at this early stage it may be in your best interest to explore this option with an attorney as litigation can be lengthy and expensive.

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