Under Georgia law, a business owner may be held personally liable for the debts and damages incurred by their company under certain circumstances. Generally, corporations and limited liability companies (LLCs) are separate legal entities from their owners, meaning that the owners are not typically personally responsible for the company's debts or liabilities. However, there are several exceptions to this rule.
First, business owners may be personally liable for debts or damages if they have personally guaranteed the company's obligations. This means that the owner has agreed to be responsible for the company's debts and liabilities if the company is unable to pay them.
Second, business owners may also be held personally liable if they have engaged in misconduct, including fraud or other intentional wrongdoing, that results in harm to another party. In such cases, the injured party may be able to pursue a claim against the owner individually, rather than the company.
Finally, if a company is not properly formed or maintained, and does not meet the legal requirements for limited liability, the owners may be personally liable for its debts and obligations.
It is important for business owners to take steps to protect themselves from personal liability, including forming a legally recognized business entity, obtaining appropriate insurance coverage, and avoiding engaging in any fraudulent or unlawful activities. If a business owner is concerned about their potential personal liability for their company's debts or obligations, they should consult with an experienced business attorney for guidance.
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