Can I Sue the Individual Who Owns the Company?

Unfortunately, business disputes are extremely common in the United States. Regardless of the underlying issue in the dispute, most Plaintiffs are ultimately seeking monetary damages in the lawsuit. If you are contemplating filing a lawsuit against a company, and are planning to ask for monetary damages, you are undoubtedly hoping that the company has sufficient assets to pay the judgment should you be victorious. What happens though if the company does not have sufficient assets? Can you also sue the individual who owns the company? The answer is somewhat complicated.

Pursuing litigation against a company can be a costly endeavor, both in terms of time and money. Of course, if there is a sufficient amount of money at stake it may very well be worth the time and money to pursue the litigation; however, it is also important to consider what will likely happen if you do win the lawsuit. Winning a civil lawsuit often means obtaining a judgment against the Defendant. That judgment is only beneficial if you are able to execute on the judgment, meaning you have a way to force the Defendant to pay the judgment. If the company itself is not financially sound, a judgment may amount to nothing more than a piece of paper. The owner of the company, however, might provide another avenue for collecting what is owed to you.

The question to ask your attorney is not whether you can sue the owner of the company, but whether suing the owner of the company would be helpful to the lawsuit. You can always add the owner as a Defendant in the lawsuit; however, the owner may be protected from liability or the owner may be judgment proof. If the company is a corporation, the presumption is that the owners are shielded from liability for the debts and obligations of the company. It may be possible though to “pierce the corporate veil” if the corporation is only a corporation on paper. If you can do that you will be able to go after the owner directly. If the company structure is something other than a corporation there is also a good chance you can directly include the owner in the lawsuit because most other legal entities do not provide the same liability protection a corporation does for the owners.

Finally, it is important to consider whether or not the owner has any assets that can be used to satisfy a judgment if you obtain one. A $100,000 judgment doesn’t do you much good if the judgment debtor owns nothing of value. Of course, he/she could hit the lottery tomorrow or strike it rich in business five years from now. As long as your judgment is still enforceable (state laws vary with regard to the amount of time a judgment can be enforced) you can pursue enforcement whenever you believe the Defendant has sufficient assets with which to satisfy the judgment.

As you can see, a considerable amount of thought and strategizing usually goes into deciding when and how to initiate litigation against a business. To ensure that your lawsuit is a success, and that you are able to enforce a judgment should you obtain one, it is always best to work closely with a Conshohocken, Pennsylvania business law attorney. Contact the business law attorneys at Curley & Rothman, LLC by calling 610-834-8819 today to schedule your free consultation.