While forming a Limited Liability Company (LLC) is not a guarantee that the members will not be named in a lawsuit in their personal capacity, the LLC is a legal entity that provides liability protection to the members (assuming the LLC is properly formed and properly run).
The LLC should always enter into contracts in its own name (and not the names of the individual members), should have its own bank accounts, should keep its funds separate from those of the members, and should conduct business under the LLC name.
If these steps are taken, any obligation of the LLC should be limited to the LLC and the members should be insulated from such liability. This does not mean that the members will not be named in a lawsuit, rather that the court should find that the members are not liable for the LLC obligations.
Note, however, that if a member personally guarantees the debts of the LLC, co-signs with the LLC, or takes action in his or her personal capacity rather than as a member or manager of the LLC, the member could be subject to personal liability.
This information applies to all USA states; the state in which the filing is made does not change the above information.
To quickly and easily create a Limited Liability Company, see Standard Legal’s LLC legal forms software page.
For advice specific to any personal legal questions, Standard Legal always recommends you consult an attorney; you can find a local attorney for FREE at Standard Legal’s Attorney Find page.