Chico Corporate Law Attorney
Reliable Legal Counsel on Corporations
Forming a corporation provides "limited liability," which limits an individual's personal liability for business debts. Although this sounds appealing, there is far more to creating a corporation than filing a few papers. Individuals who seek to start a corporation must be extremely organized by making decisions and keeping records according to corporate formalities. Running a corporation takes hard work, but a Chico attorney from our firm can help make the process easier.
One of the main draws of a corporation is that the owners will only lose the money they have invested in the corporation if the corporation falls into debt. Creditors of the corporation cannot collect the owner's personal assets, and only corporate assets can be used to pay off debts. However, there are some exceptions to limited liability where an owner's personal assets will not be protected. Under these circumstances, it is especially important to have the guidance of a Chico attorney who can represent your rights.
Exceptions to Corporation Limited Liability
There are some circumstances in which limited liability will not protect an owner's personal assets and the owner can be held personally liable.
The following are good examples of that:
- If the owner directly and personally injures someone
- If the owner fails to deposit taxes withheld from employees' wages
- If the owner personally guarantees a bank loan or business debt on which the corporation defaults
- If the owner does something illegal intentionally that harms the company or someone else
In some cases, the court can rule that a corporation does not actually exist and therefore, that the owners cannot be shielded from personal liability for their actions. It is always wise to have liability insurance to protect your corporate assets from lawsuits and claims, and a solid liability insurance policy can protect you from many risks of doing business.
The knowledgeable attorneys at The Law Office of Nikki Farris can help you seek protection from these risks and more. We have been practicing business law under our former firm name, Baker & Farris, for several years and we are well-equipped to handle your case.
Contact our firm to speak with a Chico corporate law attorney to schedule your consultation today!
“Nikki Farris is very easy to talk to, professional and knowledgeable.” - Rachele T.
“Fast consultation and excellent service.” - Lucian R.
“Nikki was so kind, so compassionate.” - Kali H.