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Why was he personally liable?
by jlgaddis 9y ago
Why was he personally liable?
- majjam 9y agoI suspect its because he won't have setup the company as one with limited liability: https://en.wikipedia.org/wiki/Limited_liability https://en.wikipedia.org/wiki/Limited_liability the result being that when people sued, they sued him personally rather than the company.
- morogop 9y agoor he had it as an LLC, but made a mistake along the way that pierced the corporate veil. Or as a small business, he was just straight-up forced to pierce the corporate veil. (banks do this to small biz all the time).
- matte_black 9y agoIt's not always so simple when you're a small company owned by one person. Even if you have an LLC, if you run into significant money problems someone with enough resources WILL come after you personally.
- rbcgerard 9y agoMore than likely he borrowed money and despite the entity structure, personally guaranteed it (which is typical for most small business loans)
- phil21 9y agoIf you are a small business with no significant assets or revenue - say you are plugging away making $4k/mo scraping by - you will likely not be getting a merchant account without a personal financial guarantee. The corporate veil is mostly a fiction for small bootstrapped startups without initial seed capital.