Personal liability arising from business obligations can devastate the accumulated wealth of a lifetime of work. Personal liability may extend to business losses, but other obligations may also reach individuals, including:
- Damage awards in lawsuits
- Tax penalties
- Back wages and benefit payments
- Limited liability offered by corporations and other business entities shelters business owners from personal liability.
- Nonetheless, if an owner or director performs certain personal acts, behaves illegally, or fails to uphold statutory requirements for corporate status, he or she may face personal liability despite the corporate shelter.