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We currently have a LLC for a real estate business. 3 members (siblings). My question is if one of the members is convicted...

We currently have a LLC for a real estate business. 3 members (siblings). My question is if one of the members is convicted...

Q: Can 3 people be on an LLC?

Yes, an LLC can have three or more members. There is no limit to the number of members in an LLC, and they can be individuals or entities. This flexibility allows for various ownership structures and management arrangements, making it a popular choice for small businesses and partnerships.

Q: Does LLC protect against personal liability?

Yes, an LLC provides protection against personal liability for its members. This means that members are typically not personally responsible for the LLC's debts or legal issues. However, this protection can be lost if members act outside their authority or engage in illegal activities that affect the LLC.

Q: Does an LLC protect you from personal liability?

An LLC does protect members from personal liability, meaning they are not personally responsible for the company's debts. However, this protection is not absolute. If a member commits fraud or illegal acts, or if they fail to maintain the LLC's formalities, they may be personally liable for those actions.

Full question:

We currently have a LLC for a real estate business. 3 members (siblings). My question is if one of the members is convicted of a crime, can the LLC be vulnerable?

Category: LLC
Date: 04/07/2025
State: New York

Answer:

The answer depends on the nature of the crime. A limited liability company is generally liable for loss or injury caused to a person, or for a penalty incurred, as a result of a wrongful act or omission, or other actionable conduct, of a member or manager acting in the ordinary course of the business of the limited liability company or with authority of the limited liability company.

This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.

FAQs

Do all members of an LLC have limited liability?

Yes, all members of an LLC generally have limited liability. This means that members are not personally responsible for the LLC's debts or liabilities beyond their investment in the company. However, this protection can be compromised if a member engages in illegal activities or if the LLC is not properly maintained. It's important to follow legal and operational guidelines to ensure limited liability is upheld.

Can 3 people be on an LLC?

Are members of an LLC personally liable?

Generally, members of an LLC are not personally liable for the company's debts or legal obligations. Their liability is limited to their investment in the LLC. However, members can be held personally liable if they engage in wrongful acts or if the LLC is not properly maintained, such as failing to adhere to formalities or commingling personal and business funds.

Does LLC protect against personal liability?

Does an LLC protect you from personal liability?

Can I be sued personally if I have an LLC?

Yes, you can be sued personally even if you have an LLC. While the LLC structure generally protects members from personal liability for business debts, you can still be personally liable for your own wrongful actions or if you fail to maintain the LLC properly. It's essential to adhere to all legal requirements to preserve your limited liability.