Legal Question in Business Law in California

Re: Breach of Lease contract.

I agree with Mr. Gibson, and I'd like to add that whether the assets of the LLC business are safe from attack by the landlord of the proprietorship, or other creditors, may also depend upon how the LLC acquired these assets and how the LLC has been run.

An LLC, like a corporation, is subject to "veil piercing" or application of the "alter ego" theory. If it has been operated with disregard of its separate identity by its owner, it may be held liable for the owner's debts.

Also, if personal assets have been transferred to the LLC without the owner receiving reasonably equivalent value, the transfer might be attacked as fraudulent. So, don't think about transferring your house to the LLC unless the LLC can (and does) pay you fair market value.

Re: Breach of Lease contract.

I assume the other company is a sole proprietorship. Your first step is to look at your lease agreement to see what it says about any breach. There also may be a way, or ways, for you to avoid breach.

The landlord will likely try to sue you personally for the unpaid rent. There is a chance he could try to go after the LLC but his success would depend on the relationship between the two businesses and your lease agreement. Feel free to contact me directly to discuss this more.