Legal Question in Business Law in Iowa
Construction
Can a 100% owner of LLC collapse that entity to zero assets to avoid paying a liability?
Asked on 2/28/07, 12:18 pm
1 Answer from Attorneys
Robert Luedeman
solo practitioner
Re: Construction
Yes, but don't expect to avoid a lawsuit. If a sole owner of an LLC incurred a liability and then used the corporate entity strictly to stiff its creditors (a throwaway LLC in other words) that could suggest that a court pierce the corporate veil.
The best way to look at this is imagine yourself on the other side of this. What do you suppose you'd do?
Answered on 2/28/07, 12:39 pm
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