3.
Re: can my LLC apply a DBA? Apr 2, 2009 4:46 PM
in response to:
jamx551
Again, I'm not an attorney, but as I understand it, there are two basic exceptions to limited liability for an LLC in Texas -- guarantor and alter-ego.
An LLC member is not liable for the debts of the LLC unless the member personally guaranteed the debt -- in which case, the member will become personally liable. Likewise, if an LLC is guaranteeing the debts of its operating divisions or subsidiaries, then it will be liable for those debts.
When courts impose the Alter-Ego Doctrine, they essentially declare that one legal entity is merely an alter-ego or a "business conduit" for the other entity. This happens with single member LLCs frequently -- i.e., the court declares that the LLC and the member are really one in the same (i.e., that the business is essentially functioning as a sole proprietorship) in which case, the member's liability is no longer limited. The same doctrine applies to operating divisions and subsidiaries -- if they are merely different names or business conduits for the same entity, then liability would not be limited.
If you're in an area that has oil and gas operations, you'll notice that a "parent" company usually has multiple LLC subsidiaries for exploration, services, production, distribution, reserves, etc. -- each capitalized and managed as a separate stand-alone company, in part to protect that limited liability status.
