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Category Archives: Personal Liability

Can you be liable for referring somebody else?

October 3, 2017

We live in a world of referrals, and it is all about getting the right people connected with the right people. At times, our clients need help that we cannot provide. In truth, if we are being a great service provider, we know the limits of our ability and we want to make sure those clients are taken care of.

The short answer is “Yes, we can be responsible for negligent referrals.” There are cases that hold lawyers and other professionals responsible for making referrals.… Read the rest

Sole Prop vs. LLC vs. Corp.

October 2, 2017

I am going to discuss one of the most common questions I get when I speak to audiences with newer businesses. Should I be an LLC, should I be a corporation, and is it okay to be a sole proprietorship? It really depends on your situation, so we really want to look at your circumstances. I get clients in all of these different baskets, and we really have to look at it, carefully.

Now, typically, if you have more than one person in your business, you want to get rid of the sole proprietorship.… Read the rest

Copyright Law

September 5, 2017

I want to discuss a very important issue, which is copyright law. You need to understand this and you need to sit down and talk to your attorney to make sure you understand it. A lot of businesses run afoul of it all of the time. There are misunderstandings.

Some people think that just because you attribute a quote to somebody else that you can use the material. That is not necessarily the case. There’s a lot more complicated analysis than that.… Read the rest

Does Texas Hold a Partner Liable for a Partnership Debt? (Part III)

September 1, 2017

In our previous post, Does Texas Hold a Partner Liable for a Partnership Debt, we discussed the Texas Supreme Court’s holding in American Star Energy and Minerals Corporation v. Stowers, [1] that a creditor cannot sue individual partners to satisfy a partnership debt until a judgment is passed against the partnership and goes unsatisfied for 90 days.

There is a continuation of this story.  The partners argued that the court’s holding imposed “automatic” liability– essentially claiming that the court undermined their due process rights on grounds that they should have been named and served in the lawsuit against the partnership so that they would be on notice of their potential liability and have an opportunity to contest it.… Read the rest

Does Texas Hold a Partner Liable for a Partnership Debt? (Part II)

August 31, 2017

In American Star Energy and Minerals Corporation v. Stowers, [1] four partners formed a general partnership called S & J Investments (“S&J”) to invest in oil and gas properties.  S & J contracted with American Star Energy and Minerals Corporation (“American”) to operate these properties.  Later, American sued S & J for breach of contract, which resulted in a final judgment in the amount of $227,884.46 against S & J in 2008.

S & J was undercapitalized and unable to satisfy the judgment debt.… Read the rest

Does Texas Hold a Partner Liable for a Partnership Debt? (Part I)

August 30, 2017

You might have seen in our previous blog series on general partnership, where we talked about what general partnership is and why it is vital for business owners to know about it.  In essence, we wrote that, despite the advent of limited liability companies (LLCs), business owners frequently form a general partnership, oftentimes without even realizing it.  Generally, partners in a general partnership are jointly and severally liable, and each partner is personally and individually liable for the entire amount of all partnership obligations.Read the rest

Can Others Hold Me Liable as a Partner, When I Am Not a Partner? (Part III)

August 29, 2017

Branscome v. Schoneweis

In Branscome v. Schoneweis, Schoneweis and Woodrum, who were brothers-in-law, were associated with the operation of a live stockyard called Tallula Cattle Company (“Tallula”). [1] Schoneweis was the owner since he provided the initial working capital and Woodrum was the manager who was entitled to an equal share of commissions on the sale of all cattle of the live stockyard which was a market agency business. At the same time, both men continued as individuals in the business of buying and selling livestock in commerce (dealer business).… Read the rest

Can Others Hold Me Liable as a Partner, When I Am Not a Partner? (Part II)

August 28, 2017

Cox Enterprises, Inc. v. Filip

In Cox Enterprises, Inc. v. Filip, Filip was the owner of Trans Texas Properties and Elliott was not. [1] One of its employees filled out a credit application to obtain newspaper advertising services for the business and falsely listed Elliott as an owner. [2] The employee had no authority to make such representation and Elliott did not hold himself out to the advertising company as having any ownership interest. [3] The advertising company relied on the employee’s representation that Elliott was an owner and rendered its services to the business on credit, but made no effort to verify the accuracy of the representation.… Read the rest

All postings are intended to be planning tools to familiarize readers with some of the high-level issues discussed therein. No posting is intended to be a comprehensive discussion and additional details should be discussed with your transaction planners including attorneys, accountants, consultants, bankers and other business planners who can provide advice for your circumstances. This article should not be treated as legal advice to any person or entity.