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Do people that create startups have debt in their own name after the startups fail? Or does the debt go down with the company and does the founder walk away deb
by theonlyjesus 2y ago
Do people that create startups have debt in their own name after the startups fail? Or does the debt go down with the company and does the founder walk away debt free?
- DanielHB 2y agoDepends on how you set up the company. Usually most startups are done with a limited liability company which usually causes the debt to go down with the company while keeping your personal finances safe. https://en.wikipedia.org/wiki/Limited_liability_company https://en.wikipedia.org/wiki/Limited_liability_company > The owners of the LLC, called members, are protected from some or all liability for acts and debts of the LLC, depending on state shield laws. But to start a company you need some cash injection, that can come from your personal finances. Now you could get a personal loan to then inject into your company, which would make you personally liable for said loan. Personal loans are easier to get than company loans (because you can't default on them as easily), but I never heard anyone do that. Usually you are only personally liable if you commit some sort of crime like fraud.