PROTECTING YOUR PERSONAL ASSETS FROM BUSINESS DEBTS
by Joel T. Fornara, Attorney, Musgrove Drutz Kack & Flack, PC
There is no reason for a business owner to operate a business without the protection of a legal entity, such as a corporation or limited liability company (LLC). Whether you are an online retailer or are a “mom and pop” brick-and-mortar business, do not make the consequential mistake of being a sole proprietor. As a sole proprietor, there is no “corporate veil” separating you from your business. Instead, the business and the business owner are one and the same, and the owner is personally liable for all business debts.
While this may not concern you now, a sole proprietorship can quickly turn into a financial nightmare if your business gets sued and has a judgment entered against it. Without the protection of a legal entity, many of your personal assets may be levied upon or garnished to satisfy the judgment against your business.
Forming a corporation or LLC is a critical step toward protecting your personal assets. In general, an Arizona business owner is not personally liable for the obligations of the business. Instead, a judgment creditor must overcome a very difficult legal hurdle known as “piercing the corporate veil” before it can attempt to collect on the owner’s personal assets.
Whether a corporation or LLC is more suitable for your business depends on the individual aspects of your business. Our law firm represents a wide variety of businesses from startups to established companies. Call our office to schedule a consultation so that we can help you grow your business while protecting your personal assets.
ATTORNEY JOEL T. FORNARA ADVISES LOCAL BUSINESSES AND REPRESENTS THEM IN THEIR TRANSACTIONAL AND LITIGATION NEEDS. MUSGROVE DRUTZ KACK & FLACK, PC IS A FULL-SERVICE LAW FIRM SERVING OUR COMMUNITY FOR MORE THAN 30 YEARS. FOR MORE INFORMATION ABOUT THE FIRM, GO TO MDKFLAW.COM.
Meet Two of Our Attorneys
Mark W. Drutz received his B.A. cum laude from the University of Kentucky and received his law degree from the University of Iowa College of Law in 1980. He has been a member of Musgrove Drutz Kack & Flack, PC since 1985. His practice is focused on litigation, that includes bodily injury, wrongful death, real estate and commercial cases. Mark appears in courts throughout Arizona, is a member of the Arizona Trial Lawyers Association and has been a member of the State Bar of Arizona since 1981.
Jeffrey D. Gautreaux earned his Juris Doctor summa cum laude from the University of Arizona College of Law, and his B.A. summa cum laude in Media Production from Hastings College in Hastings, Nebraska. His areas of focus at the firm are criminal defense, civil litigation and appeals. Jeffrey also handles real estate disputes and personal injury cases. He previously clerked for the Hon. Patricia K. Norris at the Arizona Court of Appeals. He is a member of the State Bar of Arizona, the Yavapai County Bar Association, and is admitted in the United States Court of Appeals for the Ninth Circuit. He also serves on the Board of Directors for the Prescott YMCA of Yavapai County and is President of the Board of Directors of the Forest Trails Homeowners Association.
