Suing an llc with no assets

When can you sue the owners of a LLC? Like a corporation, an LLC is a separate legal entity from the owners. Can you sue a LLC company? Even if the LLC has no money, the owners usually are safe.

Under the right circumstances, though, a plaintiff or creditor can collect from the owners too. For example, if the owner lacks the funds to settle a lawsuit, then the owner must pay out the difference from their own personal assets.

Also, an owner is usually not able to be sued for actions taken by the business. When instructing, it helps a great deal to provide the HCEO with details of all trading addresses and other locations where there are assets. If the LLC is insolvent (i.e. the debts exceed the assets ) and if there are no assets distributed to the LLC owners, then their is no personal assets which a creditor can pursue against the LLC owners. Secon dissolve the LLC once business operations have ceased and once known creditors have been paid or otherwise resolved. If you have known creditors in your business, you cannot close down an LLC for the sole purpose of evading those creditors and then re-open your business with another.

The bottom line is you want to avoid personal liability for paying debts or being involved in lawsuits against the company. Fraudulent conveyance of assets. If you just got sued and want to protect your assets , I’m sorry to say that it’s too late.

If you were to transfer your assets into an LLC , you would be fraudulently conveying them. Because the LLC is insolvent and no income is forthcoming perhaps it is good time to disolve the LLC and notify your creditor of your disolution. Start keeping a detailed log of all calls and letters.

Both the other insurance company and the lawyer for the plaintiff will do an asset check on you to determine you really have nothing. You should also demand in. They simply do not have the assets to go after, and it just isn’t worth it.

Most people really are sue proof. If you are suing to get money, you need to know that your opponent - the defendant - is insured and the insurers are covering the claim, or that the defendant has enough assets to pay you themselves. Otherwise you will waste both your time and money. If the owners, called members, dissolved the company properly, then the chance of the lawsuit being successful is slim. If you don’t mind waiting, recording your judgment with the recorder’s office will put a property lien on the defendant’s real estate, and you’ll be paid once the property gets sold.

Anonymous companies are always doing illegal activities. Mixing of Assets and Finances. A creditor of the LLC often seeks to use the concept of “piercing the corporate veil” to make an LLC member personally liable for an LLC debt, particularly when. How to go about collecting money from someone with nothing to give is a common question.

Unfortunately, there is no good answer—if someone has little income and few assets , they are effectively “judgment proof” and even if you win against them in court, you effectively lose: you spent the time and money to sue and receive nothing in return. A judgment against your LLC may just result in an uncollectible judgment, but if the plaintiff sues you personally on an alter ego theory, you could be held personally liable. That suit was successfully settled in my favor.

Therefore, leading someone to believe that there is a very high likelihood of prevailing is not consistent with my own experience. A good lawyer will vigorously attack the members if an LLC has no assets , and they regularly and often make it stick. Although it’s not a very wise decision, it is possible to sue someone, even if the person being sued has no valuable assets.

However, most people investigate the possibility of collecting from the individual they are considering suing before they go through the time consuming and expensive process of a lawsuit.