Which states do not allow personal negligence to be protected by an LLC?


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As a follow up on another question about LLCs, and a comment on an answer -- which states do not allow personal negligence to be protected by an LLC?

LLC

asked Aug 11 '12 at 02:43
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Blunders .
899 points

2 Answers


1

It was my comment. The only reason I put the reference in there to states, is that it's an issue that's decided by state law, and I can't tell you about the laws of all 50 states.

Luckily, however, the South Carolina Supreme Court recently decided the issue there and, in doing so, listed out what a bunch of other states do. See: http://www.judicial.state.sc.us/opinions/displayOpinion.cfm?caseNo=27107 The answer is that in most states, the LLC does not protect the member from his own tortious conduct.

answered Aug 11 '12 at 02:56
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Chris Fulmer
2,849 points

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Some states don't allow certain professionals to work under an LLC protection. For example, in California, professionals licensed by the state are not allowed to open LLC. That means that you will not find a CPA, attorney, architect, licensed engineer, doctor, hairdresser, etc working legally under an LLC formation. But if you're not licensed by the state then there's no limitation, so CPA cannot work through LLC, but EA (licensed by the US government, not state) can; civil engineer cannot work through LLC, but software engineer (no license required) - can.

Of course, LLC protection will not cover any criminal activity or illegal behavior of a member.

This differs from state to state, and you should check all of the 50+1 state laws (and DC) to answer your question.

This is in no way a legal advice, and you should talk to an attorney for an authoritative answer.

answered Aug 11 '12 at 03:17
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Littleadv
5,090 points
  • I would appreciate downvoter to comment and explain what it is you're disagreeing with. – Littleadv 6 years ago

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