Formation Of A Corporation And Limited Liability Company
By forming and doing business as a corporation or a limited liability company (LLC) you may be able to limit your personal liability for business debts.
A corporation is a legal entity that is separate and apart from the individuals who own, operate or manage it. In New York State the law allows you to be the sole owner of all of the stock in a corporation, manage the corporation and be the only employee of the corporation; however, if you organize the corporation, do business as a corporation and not as an individual and do not represent yourself to others as an individual who is doing business, but rather as an officer or employee of the corporation, you and the corporation should be considered as separate entities. Thus, if you properly form a corporation and transact business as a New York corporation you should be able to insulate yourself from liability for business debts and lawsuits for the corporation’s failed business transactions.
Forming a corporation is no guarantee of insulation for all wrongful or careless acts of an officer, manager or employee of the corporation. Generally, formation and doing business as a corporation, rather than doing business as an individual or a partnership, will protect the individuals who own the stock in the corporation from liability for judgments obtained and entered against the corporation, provided that you do business and conduct yourself in your corporate capacity as an officer, director or employee and without intent to defraud anyone. Your home, personal bank accounts and other personal property should remain immune from any lawsuits and judgments obtained against the corporation.
Consult With A Lawyer
The Law Office of Jerold S. Slate has successfully provided legal counsel for individuals in the formation of a Corporations and Limited Liability Company.