Protecting The Business Owner

Most business owners form an entity through which the business is operated.   Any of the following may have been formed when the company was started:  a corporation, a limited partnership, or a limited liability company (LLC).  One of the reasons to form an entity is to protect you, the business owner, in your individual capacity, from any liabilities of the business.

However, even with the protection of an entity, an owner must remain diligent.  In a recent New Hampshire case, the court ruled that an individual member (owner) of an LLC could be liable if the owner participated in the action that caused the harm, even if it was on behalf of the LLC.  For example, if the owner had knowledge of lead paint and did not do anything to correct the problem, then the owner could be liable.  But more importantly, the Court found that merely being a member (owner), without some other overt act, is not enough to make the member (owner) liable for the operations of the business in the entity.

It is important to note that protection provided by the entity may not be absolute and any owner should be aware of how their business is operated.


This information does not constitute the rendering of legal, accounting or other professional services by Pete Benenati or Benenati Law Firm, PC. This information is not intended to create or provide an attorney-client relationship. Although care is taken to present the material accurately, any implied or actual warranties as to any materials herein are hereby disclaimed along with any liability with respect thereto.

Business Law, Risk Management ,