Legal Question in Business Law in Alabama
I am the sole shareholder of an S-Corporation. I'm about to put the corporation into bankruptcy protection. Will I personally be responsible for the remaining debts? Will this effect my personal credit?
1 Answer from Attorneys
s a Franchise Attorney I can say the following. The normal rules (which should not be affected by a bankruptcy filing) are as follows. Officers of corporations only have personal liability if (1) they failed to follow corporate requirements and formalities (like not having regular minutes, failing to pay withholding taxes, etc.); or (2) they signed personally (as opposed to in a corporate capacity) for corporate debts; or (3) they personally guaranteed corporate debts. Consult with a good bankruptcy or franchise attorney in your area for specific advice.
Mr. Franchise - Kevin B. Murphy, B.S., M.B.A., J.D.
Franchise Foundations, a Professional Corporation
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