My spouse started an LLC with his brother after we got married. My name is not attached to the business and I am not involved in the business in any way. My spouse is requesting I sign a Consent of Spouse document waiving my right to make decisions or be a voting member of the company.
We live in a Community Property state (California) and my concern is that if the business were to incur debt and cannot pay creditors, will I (as a spouse) be held liable for any of the business debts (for example: a business loan) since the business was started after we got married? I know LLC's have certain protections but I am not clear nor educated in Business Law in regards to California.
My other concern is that if waive my right and sign the Spousal Consent Form, I will have no legal strength to encourage the dissolution of the business to satisfy any of the debts the business may incur.
Thank you for any help or insight you can provide about LLCs and Spousal responsibilities in California.
1 Answer from Attorneys
you are wise to be careful in executing a waiver. an llc does allow for limited liability to its members but to the extent that your spouse executes any type of a guarantee then the community property assets and possibly even your separate property assets could be held liable for those specific dates in order for the LLC to have maintained limited liability for its members the LLC must be properly capitalized.
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