By Bruce Jervis
A primary purpose of a limited liability company, much like a corporation, is to shield company owners from personal liability for business losses. When the company enters into a contract, the company’s assets are at risk. But the company owners -- called “members” -- are not putting their personal assets at risk.
In order for an LLC to be effective, the members must be painstakingly careful to always make it clear they are acting on behalf of the LLC and not personally. This is true not only when signing a contract, but with all correspondence and communication. It is also crucial to avoid comingling of company and personal funds or other assets. If these practices are followed, an individual member of an LLC should not be at personal risk. ... Read more.
Featured in this Week’s Construction Claims Advisor:
- Sole Member of LLC Not Personally Responsible for Defective Work
- Unused Equipment Was Not 'New'
- Low Bid Spoiled by Faulty Subcontractor Listing