My question involves business law in the state of: PA
Alter Ego Liability
"Alter ego" liability is a legal exception to LLC limited liability protection that arises when the LLC is managed in a way that fails to distinguish between the investors and the LLC itself. A court may invoke this exception in favor of a creditor and allow him to sue investors on an LLC debt if, for example, the LLC co-mingles LLC funds and the investors' personal funds, or if investors commonly withdraw money from the LLC's treasury for personal uses.
I was hoping someone could give clarification on the above. Is the one person who is doing the wrongful actions liable or every investor? There is a second part, if one investor (partner) is taking money and it's not properly recorded and the LLC is audited by the IRS are all investors liable or just the person stealing money?
Alter Ego Liability
"Alter ego" liability is a legal exception to LLC limited liability protection that arises when the LLC is managed in a way that fails to distinguish between the investors and the LLC itself. A court may invoke this exception in favor of a creditor and allow him to sue investors on an LLC debt if, for example, the LLC co-mingles LLC funds and the investors' personal funds, or if investors commonly withdraw money from the LLC's treasury for personal uses.
I was hoping someone could give clarification on the above. Is the one person who is doing the wrongful actions liable or every investor? There is a second part, if one investor (partner) is taking money and it's not properly recorded and the LLC is audited by the IRS are all investors liable or just the person stealing money?
Business Ownership: LLC Question - Alter Ego Liability
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