Are LLC members personally liable for company debt?

Are LLC members personally liable for company debt?

• A. Yes, they are fully liable
• B. Yes, but only partially
• C. No, they are not personally liable
• D. Only if they are active in management

Answer: (C)

Limited Liability Companies (LLCs) are designed to provide a flexible structure while protecting their members from personal liability for business debts. When individuals form an LLC, the liabilities and debts of the company typically are not passed on to the members; instead, the LLC itself is responsible for its debts. This means that members' personal assets are generally shielded from claims against the LLC. Therefore, if the company incurs debts or is sued, members cannot be held personally liable for those obligations, barring specific exceptions such as personal guarantees or fraudulent activities. This is a foundational concept of LLCs, which is why the correct answer reflects the principle that members are not personally liable for the company's debts.

Limited Liability Companies (LLCs) are designed to provide a flexible structure while protecting their members from personal liability for business debts. When individuals form an LLC, the liabilities and debts of the company typically are not passed on to the members; instead, the LLC itself is responsible for its debts. This means that members' personal assets are generally shielded from claims against the LLC.

Therefore, if the company incurs debts or is sued, members cannot be held personally liable for those obligations, barring specific exceptions such as personal guarantees or fraudulent activities. This is a foundational concept of LLCs, which is why the correct answer reflects the principle that members are not personally liable for the company's debts.