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Old 10-06-2009, 08:21 AM
  #5  
NoyGonnaDoIt
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Joined APC: Nov 2008
Posts: 826
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Like I said. This is very misunderstood.

An LLC will fairly effectively protect your personal assets from contractual obligations if you don't sign a personal guaranty.

An LLC will also fairly effectively protect your personal assets from others' tort liability - a co-owners, an employee's.

But an LLC does not protect your personal assets from your own tort liabilities. Period.

Example:

Two people buy an airplane together. They set up a corporation or LLC that owns the airplane. Owner A negligently crashes it and injures a passenger.

Owner B's personal assets are probably not at risk. The LLC (with some exceptions) protects B's personal assets from A's liability for negligence.

But the existence of the LLC does not protect A's personal assets from his liability for his own negligence.

That is not something that an LLC, LLP, corporation or other form of limited liability entity does in any state in the US that I'm aware of. They are not there to protect someone for responsibility for his own negligent or wrongful acts. That's what insurance is for.

In the CFI context:

Q: If I crash an airplane with a student and I'm teaching through an LLC, will the LLC protect my personal assets?

A: No.
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