Legal Question in Business Law in Oregon

Protection under a corporation

My husband had an S Corporation(sole proprietor). The business is closed and there are tax and other liens on our house for the corporation debt. We were told a corporation would protect us personally if something happened. Can they take what they want, how they want, from us to satisfy business debt?


Asked on 3/13/06, 2:20 pm

1 Answer from Attorneys
Susan Burns Law Office of Susan Ford Burns

Re: Protection under a corporation

Formation of a corporation does not shield you from failure to pay taxes. The responsible individuals can still be held liable for many taxes related to corporations that they owned.

How the corporation acted and whether you or your husband signed personal guarantees for business debts will determine whether you or your husband are personally liable for corporate debts other than taxes.

You should consult with an attorney promptly for assistance in determining what debts you are liable for and help in negotiating payment of those debts. If you are unable to pay the debts that you are responsible for, you may also want to contact a bankruptcy attorney.

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Answered on 3/13/06, 8:18 pm


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