Legal Question in Business Law in Kentucky

Re: LLc corp lease question

It is not possible to give you a clear legal answer to your inquiry without a more detailed evaluation of the facts of your case.

Basically, one of the reasons for transacting business in the format of a Limited Liability Company is to limit the personal and individual liability of the members. Any member who signs a document such as a lease or a promissory note in his personal capacity (and not merely as an officer of the LLC) will become personally liable to perform on the agreement, in the event the LLC fails.

Often times, banks and landlords are reluctant to enter into agreements with Limited Liability Companies unless the members (principals) are individually and personally obligated, along with the LLC.

Of course, the LLC, even if formed after the signing of the lease, can ratify the lease and agree to indemnify the signing member, but this

does not really protect the signing member in the event of a default by the LLC.

You should not take any action, based upon my advice, without consulting an attorney and explaining all the facts to him. You are best advised to seek the services of a competent Kentucky attorney. You can telephone your local bar association for a referral, or can find a good lawyer on-line at the Kentucky Bar Association's Lawyer Referral Service:

http://www.kybar.org/Default.aspx?tabid=291

Good luck!

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