Virtually all business is transacted these days in some form of limited liability entity, such as a corporation or LLC. One of the primary purposes of these entities is to shield the owners of the entity from personal liability for the debts and obligations of the entity. This is particularly useful in the event of business failure or when all of the trade accounts cannot be paid, or in the event of a catastrophic, uninsured personal injury loss or the like. However, as anyone who has tried to do otherwise has learned, the banks providing the financing for these entities (except in very rare circumstances) require personal guaranties from the owners so that they do become personally liable for the bank debt in the event that the entity cannot pay. (more…)
Posts Tagged ‘limited liability companies’
Multiple Guarantors of a Single Debt
Tuesday, March 8th, 2011Location of Filing Financing Statements for Registered Organization
Wednesday, March 3rd, 2010Revised Article 9 makes it clear that financing statements are to be filed at the “location” of the debtor. A debtor’s “location” is dependent upon the type of debtor. One type of debtor is entities that are registered organizations under the laws of a particular state. Examples of registered organizations are corporations, limited liability companies, limited liability partnerships, limited liability limited partnerships, and limited partnerships. Generally speaking, partnerships do not have to register with states in order to be formed and therefore are not registered organizations under Revised Article 9. (more…)