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Suing sole proprieter not LLC

Tucson, AZ |

I was served in the Justice Court under my name for a debt they said I owed in 2007. It was for ads I run in a paper for my Real Estae Company. I was not an LLC yet only a sole proprieter. But I formed an LLC in March of 2008 and they are bringing me to court. I thought i was shielded from personal assets after I formed an LLC. Even though I did business as a sole proprieter. Do I have any recourse to have them change this suit to my LLC?

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Attorney answers 1


No, the LLC is not the proper party to be sued.Limited Liability Companies (LLCs) provide two levels of liability protection. First, if there are at least two members of the LLC, creditors can not levy against the member's interest in the LLC for the member's personal debts and judgments. Secondly, if the LLC is sued, the creditor or plaintiff can not attach the member's personal assets to satsify the judgment. Since the LLC was not in existence at the time you purchased the ads, it is correct for the newspaper to sue you personally. Sole propreitors are personally liable for business debts. However, if a judgement is awarded against you and the LLC has two or more members, the newspaper can not attach your interest in the LLC.( This is not considered to be a substitute for legal advice. I am admitted to practice law in the state of New York only. You should consult with an Arizona attorney for more specific information for the state of Arizona.)

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