Legal Question in Business Law in New York

What is a corporate officer liable for?

If a company owes a substantial amount of money, how much is someone listed as an officer of the company responsible for? What if they have no financial decision making powers, yet are listed on the bank papers? What happens if they resign before major problems start? My husband works for his dad, has not been paid in a while, when he was paid it was most recently by company check- payroll taxes were collected but not paid on his behalf, and that is just the beginning. The company owes everyone, and my husband is listed on the corp. papers as an officer. I want him to resign or something to protect himself and us. Any advice?


Asked on 9/09/07, 9:47 pm

2 Answers from Attorneys
Nancy Delain Delain Law Office, PLLC

Re: What is a corporate officer liable for?

Before your husband does anything, he should RUN to an attorney who concentrates their practice in tax and (nor "or"; "and") corporate law. This attorney should not currently represent anyone else associated with the company, and s/he should not be the company's lawyer.

Referrals, if needed, are available from the NYS Bar Association (www.nysba.org) and perhaps from your local county bar association.

Don't muck around with this. You need a lawyer. Hire one sooner rather than later.

Good luck.

THE INFORMATION PRESENTED HERE IS GENERAL IN NATURE AND IS NOT INTENDED, NOR SHOULD IT BE CONSTRUED, AS LEGAL ADVICE. THIS POSTING DOES NOT CREATE ANY ATTORNEY-CLIENT RELATIONSHIP BETWEEN US. FOR SPECIFIC ADVICE ABOUT YOUR PARTICULAR SITUATION, CONSULT YOUR ATTORNEY.

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Answered on 9/09/07, 10:02 pm
Christopher Hoyt The Law Offices of Christopher W. Hoyt

Re: What is a corporate officer liable for?

Your husband may be personally liable for the payroll taxes, but there are a number of tests that can be applied to determine if your husband would be personally liable. Your husband needs to speak to a business attorney right away to go over his rights and to try to minimize the damage that has been done (he should not delay at all in doing this). Even if your husband resigns he still may be liable for the past acts that occurred while he was an officer. Please feel free to call my office if we may be of any assistance to you in this matter.

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Answered on 9/09/07, 10:24 pm


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