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MrMcFunStuff t1_j2cpyrv wrote

Reply to comment by Smightmite in Roxborough homeowner says developers destroyed her property while building next door by JClurvesfries

They’re probably a LLC that’ll just fold at the first sign of trouble and nobody will be held accountable.

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lucascorso21 t1_j2dhmmu wrote

That practice doesn’t really work anymore.

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wawa2563 t1_j2dkjwy wrote

All ears/eyes. Tell us why.

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eapocalypse t1_j2dm9lu wrote

I mean even if they do their liability insurance will still be on the hook. It really only serves to protect the business owners and if they didn't do anything fraudulent then you can't pierce the veil and go after them anyway

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lucascorso21 t1_j2dsn4l wrote

Right, if they are a legitimate business, they will have the insurance and just pay the claim out.

If they involved in fraud/negligence/reckless/illegal acts, then the LLC doesn’t protect them anyway.

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lucascorso21 t1_j2dsg1g wrote

Because larger LLCs, or those simply operating like a legit business, will carry the appropriate liability insurance in the event that it’s employees screw up or when accidents happen. That’s extremely common, a best practice, and the typical result to settle the claim.

Smaller LLCs, or ones that are badly managed, will be personally involved in operations including any negligent/fraudulent/illegal actions. That involvement negates the standard LLC protections and exposes the ownership to individual liability. You also run into situations where a member claims they weren’t “directly” involved in X matter, but somehow their specific LLCs are constantly being sued for the above issues. A strong argument to make and one that leads to a settlement in order to head off the much larger ramifications.

There’s also a crap ton of legislation coming down at a federal level which is focused on improving the transparency of beneficial ownership, including for LLCs, because such business setups are constantly used for financial crimes.

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