Whether you are new to owning a company or are a seasoned entrepreneur, entering into contracts is a fundamental part of being in business. These agreements will vary in size and scope and can result in some obligation or debt being incurred by the company.
Now, in most cases, if you choose the appropriate structure for your organization (such as a corporation or LLC) you, as the owner, are shielded from liability in the event that the company cannot carry out its responsibilities. In other words, you would not ordinarily be on the hook for the resulting debts and legal obligations.
However, it’s important to note that there are times when this protection can be stripped away. This is referred to as “piercing the corporate veil” and means that owners will be held personally financially liable for the debts of the business.