ALWAYS MAKE CLEAR IT IS THE LLC AND NOT
YOU PERSONALLY THAT IS OPERATING THE BUSINESS
In a 1997 court case in Colorado, the
court ruled that a member of a Colorado LLC would be
personally liable for a business obligation despite the
fact that such member had properly formed a Colorado
limited liability company and despite such entity being
in good standing.
The reason for this is because when
the member was working for the LLC on LLC business, he
did not disclose to the other parties involved in the
business transaction that it was the limited liability
company that was the entity conducting business.
He needed to make this more clear and emphasize that he
was merely an agent of the company.
Basically, the court ruled that any
members who are active in operating and managing the
Colorado LLC business must fully disclose the LLC
The lesson here for any small
business owner in Colorado is to always be clear, not
only in your contracts and on your business cards, but
also in any business discussions and meetings, that the
business you are representing and working on behalf of
is a Colorado LLC and not you personally acting as as
Another important pointer is
to ensure a proper and complete LLC formation because a
defect in the organization process could possibly
invalidate your LLC which can cause personal liability.
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Colorado, ColoradoBusinessFormation offers the
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