ryan_hunter
Junior Member
What is the name of your state (only U.S. law)? Texas
I have 2 businesses that I have been running under my personal name. A colleague has told me that it would be better to create 2 LLC's, one for each company, so that if one of them goes out of business then the other company as well as my personal assets are completely protected. I am the only owner and the only employee. Is she correct or completely mistaken?
A couple scenarios that I am confused about:
- Company A goes out of business and owes money. Would the money be taken from Company A's remaining cash/assets, while keeping Company B's cash/assets and my personal cash/assets intact? What about personal assets that I've bought for myself using the company's profits? Would I need to pay myself an official salary or something like this in order to fully separate it?
- Company A goes out of business as a result of a lawsuit (civil). Are Company B and personal safe, or would I still be personally responsible since I'm the only owner/employee? In this case would my personal assets still be safe (including cash from Company A's profits that I've paid to myself)?
She is giving me the impression that in both of these scenarios, only Company A would be "taxed" and everything else would remain intact. However I find the logic behind this a bit silly, as it seems counter-intuitive to allow a company to just disappear and to allow the owner to continue running another business with no penalty.
If anyone could help me understand how this works I'd really appreciate it. I also wouldn't mind hiring a lawyer to help with this but don't know what type of lawyer to look for (just general business lawyer? or is there a specific field for this?)
I have 2 businesses that I have been running under my personal name. A colleague has told me that it would be better to create 2 LLC's, one for each company, so that if one of them goes out of business then the other company as well as my personal assets are completely protected. I am the only owner and the only employee. Is she correct or completely mistaken?
A couple scenarios that I am confused about:
- Company A goes out of business and owes money. Would the money be taken from Company A's remaining cash/assets, while keeping Company B's cash/assets and my personal cash/assets intact? What about personal assets that I've bought for myself using the company's profits? Would I need to pay myself an official salary or something like this in order to fully separate it?
- Company A goes out of business as a result of a lawsuit (civil). Are Company B and personal safe, or would I still be personally responsible since I'm the only owner/employee? In this case would my personal assets still be safe (including cash from Company A's profits that I've paid to myself)?
She is giving me the impression that in both of these scenarios, only Company A would be "taxed" and everything else would remain intact. However I find the logic behind this a bit silly, as it seems counter-intuitive to allow a company to just disappear and to allow the owner to continue running another business with no penalty.
If anyone could help me understand how this works I'd really appreciate it. I also wouldn't mind hiring a lawyer to help with this but don't know what type of lawyer to look for (just general business lawyer? or is there a specific field for this?)
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