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I am purchasing an existing business and the LLC is being transferred under my name. Am I liable for everything that took place prior to my take over? Ex. If someone tries to sue to the company for something that happened last year, does it go against me the current LLC member or the member of the LLC at the time of the loss?

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  • This is more of a law question than a freelancing question. If the LLC was in the wrong, the LLC is liable regardless of the current owner. Just as current stockholders experience a loss if the company loses a lawsuit and has to pay a fine. It is conceivable that the plaintiff could sue the old owner personally in addition to the LLC if there was some reason to pierce the corporate veil for something like fraud. Commented May 17 at 18:10
  • This is why it is so important to consider "ethical liabilities" when purchasing a company. Such liabilities do not show up in the financial statements and most owners don't disclose anything like that. But take a hard look at the ethical standards the owner has and consider what those liabilities might be.
    – David R
    Commented May 18 at 14:05

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You are not liable for what went before, the company is. That is what LLCs are for!

If the company were to be sued, it would have to pay any penalties from it's funds. If you put money into the company it becomes the company's money and so must be used to pay.

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