Do’s and Don’ts for Avoiding Personal Liability for Corporate Debts

Many companies choose to do business through a corporation or other limited liability entity (like an LLC). The reason is because a corporation is its own separate “person,” so shareholders or members are not liable for the company’s obligations or debts. This is true whether the corporation has a single shareholder or hundreds of shareholders. However, to take advantage of this benefit, the corporation’s affairs must actually be kept “separate” from the personal affairs of its shareholders.

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