Brenton C. McWilliams
Brenton C. McWilliams, Orange Beach Lawyer Attorney

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Posts tagged Asset Protection
Alabama Limited Liability Company Benefits: Limitation of Liability

The limitation of liability provided for the owner (member) is probably the number one reason businesses choose to form a limited liability company. Subject to some limitations, a limited liability company owner is not personally responsible for liabilities incurred by the LLC.

A contract or loan made by the LLC is a simple scenario to use as an example. The LLC has obligated itself to perform the contract or pay back the loan. The LLC functions as an entity separate from its owner. If the LLC defaults on the contract or loan, the LLC must pay any judgment using the assets or income of the LLC. However, if the LLC does not have sufficient assets or income to pay the judgment (or for the judgment creditor to collect from) the owner or owners (members) normally would not be required to use personal assets held outside the LLC to pay the judgment.

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