QUESTION

If I transfer my sole proprietorship. llc which has no debt to my spouse as a seperation agreement can i be responsible for any debts she may occur

Asked on Jan 07th, 2016 on Business Law - New York
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1 ANSWER

Appellate Practice Attorney serving New York, NY
Sole proprietorships and llc's are two different things, but I assume that you mean an llc of which you are the only member.  With limited exceptions, llc members are not personally responsible for the llc's obligations (that's the main reason that people form llc's, rather than operate businesses as sole proprietorships), so you are not responsible for the llc's debts right now (unless you have in some way contracted to be responsible, such as by proviiding a personal guaranty), and your wife will not be personally responsible for the llc's obligations after she becomes the owner.  You certainly would not be responsible for the llc's obligations incurred after you have ceased to own it.  However, if you signed any personal guaranties, they would continue in force according to their terms.  As for your wife's personal obligations, as a general rule (again with limited exceptions) you would not be responsible for them.
Answered on Jan 08th, 2016 at 9:12 AM

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