{"id":8617,"date":"2022-01-27T09:00:00","date_gmt":"2022-01-27T09:00:00","guid":{"rendered":"https:\/\/juradolawfirm.com\/?p=8617"},"modified":"2022-02-02T11:13:34","modified_gmt":"2022-02-02T11:13:34","slug":"are-you-personally-liable-for-an-llc-in-florida","status":"publish","type":"post","link":"https:\/\/juradolawfirm.com\/are-you-personally-liable-for-an-llc-in-florida\/","title":{"rendered":"Are You Personally Liable for an LLC in Florida?"},"content":{"rendered":"\n

Typically, entrepreneurs choose to open limited liability companies (LLCs) to avoid the personal responsibility of corporate obligations. As its name suggests, the main advantage of forming an LLC in Florida is obtaining protection against personal liability. <\/p>\n\n\n\n

However, is it possible to be personally liable for an LLC in Florida? Keep reading this article to find out. <\/p>\n\n\n\n

Limited Liability Company vs Personal Liability – An Overview <\/h2>\n\n\n\n

Limited liability companies grant their owners (members) a high level of protection against personal liabilities regarding business-related debts and obligations. However, it does not mean that it is sufficient to ensure limited liability protection in court.<\/p>\n\n\n\n

For example, when an LLC fails to pay a creditor, he can proceed with a lawsuit against one of the business’s members and claim they are personally liable for the business-related debts.<\/p>\n\n\n\n

If the litigation process<\/a> continues and such claims are deemed true, a Florida court can waive the company’s limited liability and determine the owner(s) are liable for the business’s liabilities. In business law<\/a>, this is known as “piercing the corporate veil”. <\/p>\n\n\n\n

Typically, a court in Florida may decide to pierce the corporate veil of an LLC when the company is extremely undercapitalized to pay its debt(s), its owners have intermingled identities or the company incurred wrongful actions (e.g., fraud).<\/p>\n\n\n\n

Limited Liability Company vs Personal Liability in Florida – As Provided by Law <\/h2>\n\n\n\n

Florida Statute \u00a7605.0304(1) provides that “a debt, obligation, or other liability of a limited liability company is solely the debt, obligation, or other liability of the company.”<\/p>\n\n\n\n

Additionally, ” a member or manager is not personally liable, directly or indirectly, by way of contribution or otherwise, for a debt, obligation, or other liability of the company solely by reason of being or acting as a member or manager.”<\/p>\n\n\n\n

Florida’s common law also re-enforces the concept of separation between a legally organized entity from its owner, as well as the prohibition of piercing the corporate veil without evidence that the entity was either organized or used to mislead creditors or commit fraud. <\/p>\n\n\n\n

In this sense, LLCs owners have protection under Florida’s Revised Limited Liability Company Act even when they do not observe corporate formalities.<\/p>\n\n\n\n

Limited Liability Company vs Personal Liability in Florida – Exemptions to the Rule <\/h2>\n\n\n\n

Nonetheless, there are exceptions to the rule that LLC members are not personally liable for business-related obligations. As provided by Florida Statutes, it is also possible to hold a member of an LLC accountable without piercing the company’s corporate veil, such as:<\/p>\n\n\n\n