My LLC is going to purchase 30% of an existing business. My question is, can my LLC be held liable for past issues such as employee, contract disputes and financial issues.
Answer
Everything depends on the terms of the transaction. If you are buying a percentage of a corporation, for instance, then the liabilities will stay with the corporation.
Answer
Yes of course, to the extent that your existing LLC will now be an owner of this business and there is always the risk of successor liability. This is why asset purchases are typically safer than stock purchases. You should be sure to conduct the proper due diligence on the entity before you invest in it (see link below for check list of some of things we look for: http://lanternlegal.com/upload_files/DUE DILIGENCE CHECKLIST.pdf)
I would suggest that you discuss your plans with a lawyer in private before diving in. If you would like to discuss further over a free phone consult, feel free to contact me anytime that is convenient.
Our firm is now referred by the American Bar Association (see under the New York section):
http://www.americanbar.org/groups/delivery_legal_services/resources/programs_to_help_those_with_moderate_income.html
Kind regards,
Frank
www.LanternLegal.com
866-871-8655
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DISCLAIMER: this is not intended to be specific legal advice and should not be relied upon as such. No attorney-client relationship is formed on the basis of this posting.
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