Can you sue an LLC? Yes, a Limited Liability Company (LLC) can be sued just like any other legal business entity. Whether you’re a customer, employee, contractor, or another business, if an LLC causes harm, breaches a contract, or violates the law, you may have legal grounds to file a lawsuit.
In this guide, we explain when, why, and how you can sue an LLC—and under what circumstances LLC owners can be held personally liable.
What Is an LLC and How Does Liability Work?
An LLC (Limited Liability Company) is a legal business structure that protects its owners (called “members”) from personal liability in most cases. This means:
- The LLC itself can be sued, not the individual owner(s)
- Members usually aren’t personally liable for debts or legal claims against the company
However, this limited liability is not absolute. There are exceptions.
Common Reasons to Sue an LLC
You may have grounds to sue an LLC for various reasons, including:
1. Breach of Contract
If the LLC fails to honor a signed agreement (e.g., service contract, vendor agreement), you may sue for breach of contract.
2. Negligence or Personal Injury
If the LLC’s actions cause harm—like a customer being injured due to unsafe premises—you can file a personal injury lawsuit.
3. Employment Disputes
LLCs can be sued for wrongful termination, wage violations, or discrimination under federal or state laws.
4. Fraud or Misrepresentation
If the LLC knowingly provided false information that caused you damage, it could be liable for fraud.
Can You Sue the Owners of an LLC?
Generally, no—you can’t sue LLC members personally, unless certain conditions apply. This protection is known as the “corporate veil.”
However, courts may “pierce the corporate veil” in cases such as:
- Fraud or illegal activity
- Commingling personal and business finances
- Gross undercapitalization (forming an LLC with no real capital or assets)
- Failure to follow LLC formalities
When the corporate veil is pierced, LLC owners may be held personally responsible for business debts and judgments.
How to Sue an LLC: Step-by-Step
Here’s a general overview of the process:
Step 1: Gather Evidence
Collect all contracts, receipts, emails, or photos relevant to the case.
Step 2: Send a Demand Letter
Before filing a lawsuit, send a formal demand for payment or resolution. This often helps avoid litigation.
Step 3: File a Complaint in Court
You can file in small claims court for smaller disputes (usually under $10,000), or in civil court for larger claims.
Step 4: Serve Legal Papers to the LLC
You’ll need to serve the LLC through its Registered Agent, which is the designated point of contact for legal notices.
Step 5: Attend Hearings and Court Proceedings
Provide all necessary evidence and witnesses to support your claim.
Things to Know Before Suing an LLC
- Know the LLC’s correct legal name (you can find it on the Secretary of State website).
- Check for registered agents and address of service.
- Consult an attorney for legal advice, especially if it’s a high-value or complex case.
Final Thoughts
So, can you sue an LLC? Absolutely. LLCs are legal entities and can be held accountable just like any corporation. While LLCs offer liability protection to their owners, they’re not immune from lawsuits—especially when they breach contracts or act negligently.
If you plan to sue an LLC or if you’re an LLC owner concerned about liability, consult with a legal expert to understand your rights and responsibilities.
