Legal Question in Business Law in Georgia

Re: S Corporation Dissolution

Generally, owners of a corporation are not responsible for the debt of the company unless they voluntarily take on that responsibility, for example, through a personal guarantee. However, if the company was not properly set up and/or maintained (by-laws, minutes, etc.), it is possible that the owners could be responsible for corporate debt.

A corporation can file bankruptcy and would have to to properly dissolve with outstanding debt. If you dissolve without either satisfying or discharging the debt through bankruptcy, the owners will probably become personally liable for the debt.

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The foregoing is general information only, not specific legal advice. No attorney/client relation has been created or should be implied.

Re: S Corporation Dissolution

There is a very good chance that individuals are, or will be, personally liable for sales taxes, credit cards, and possibly other debts dependong on the facts. Read the credit card agreements - they normally include personal liability for small or new businesses.

Bankruptcy for the corporation may not help you. It won't get you out of personal liability (corporations do not get discharges in bankruptcy), and you end up with a trustee looking back over your shoulder. Often, small business bankruptcies are a bad idea for this or other reasons.