I. Members and Managers Have Personal Liability for Llc Actions

• Library: South Carolina Limited Liability Companies (SCBar) (2020 Ed.)

I. Members and Managers Have Personal Liability for LLC Actions

The most widely misunderstood fact about limited liability companies is that both members and LLC managers often are personally liable for actions taken by the LLC. Most business owners assume that if they operate their business as an LLC that they will have no personal liability if something goes wrong. Nothing could be further from the truth.

Most business owners, and some lawyers, believe that the following statute protects members and managers from personal liability. Unfortunately, the following statute, § 33i 44-303 only provides very limited protections.

(a) Except as otherwise provided in subsection ( c), the debts, obligations, and liabilities of a limited liability company, whether arising in contract, tort, or otherwise, are solely the debts, obligations, and liabilities of the company. A member or manager is not personally liable for a debt, obligation, or liability of the company solely by reason of being or acting as a member or manger.
(b) The failure of a limited liability company to observe the usual company formalities or requirements relating to the exercise

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