If an LLC is Inactive, are its Members Still Protected from Judgments and Liabilities?

An LLC provides liability protection for any and all debts or obligations incurred in the name of the LLC.  If the members personally guarantee any LLC obligation, the entity structure will not protect the members from such obligation.

Also, if the members have not operated the LLC properly (i.e. did not maintain a separate bank account, did not enter contracts in the name of the LLC, did not keep accurate or sufficient company records, etc.), then creditors may have the opportunity to “pierce the veil” of the LLC entity and pursue the members personally for any LLC obligations.   

If the debt which you inquire about was incurred by the LLC while it was active, simply being inactive now should not change the protection offered by the entity structure.

However, there are many factors that might go into a full, detailed analysis of your situation. For such an evaluation, we recommend the services of a qualified local attorney, which you can find for FREE at Standard Legal’s Attorney Find page.