Legal Question in Business Law in Texas

If a 501 [c][3] organization goes out of business or is sued, can it's board members be held personally liable for it's debts?


Asked on 11/25/15, 6:07 pm

1 Answer from Attorneys

Yes. You can sue anyone for anything. Whether or not the plaintiff in such suit will be successful is a different question, though. Some common examples where the board can be held liable:

1. A board member personally guaranteed the contract.

2. A board member knowingly committed fraud.

3. The board members commingled the company's funds with personal funds.

4. The contracts were signed by board members prior to the formation of the company, and there was no novation of such contracts.

There are others, but they tend to be fact specific.

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Answered on 11/26/15, 7:33 am


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