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If an employee of my LLC negligently causes injury to me in the course of their employment, can I sue my LLC, like a non-owner could?

Someone
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    You do realize that lawsuits are for settling disputes, right? Are you disputing your own claim? It might be less expensive to settle with yourself rather than incur a bunch of pointless legal expenses... – Michael Hall Sep 05 '22 at 16:35
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    Reminds me of the Rutles (a parody of the Beatles). At one point in their faux history, the band members began suing each other, and in the confusion one of them (the counterpart to Ringo, IIRC), accidentally sued himself. – EvilSnack Sep 05 '22 at 19:23
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    @MichaelHall: If OP is the sole owner, then they can "settle" with themself and call it a day. But if there are other owners, this might be considered a conflict of interest and a lawsuit might become necessary. – Kevin Sep 05 '22 at 22:38
  • @MichaelHall If the LLC holds liability insurance for workplace accidents, the insurer would probably not accept a settlement; definitely not one with such a clear conflict of interest. – FLHerne Sep 05 '22 at 22:49
  • @kevin, the question stated "my LLC". There was no mention, or even hint, of other partners in the question. – Michael Hall Sep 06 '22 at 01:49
  • @FLHerne, in that case wouldn't any lawsuit be against the insurance company and not the LLC? – Michael Hall Sep 06 '22 at 01:51
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    @MichaelHall Not only can you sue your own LLC, you can sue yourself! – 200_success Sep 06 '22 at 05:41
  • Well, suing yourself is very unusual. Suing your LLC is not unusual (except you should be able to come to an agreement with your own company without going to court). But if you owned 49% of a company, and the 51% owner doesn't want to pay, quite possible. – gnasher729 Sep 07 '22 at 17:15
  • @EvilSnack Me, it reminds on a lawsuit of Hartmut Mehdorn, at that time CEO of Air berlin, sued BER, the Berlin Airport. When the lawsuit started, he was CEO of BER. https://www.n-tv.de/wirtschaft/BER-Chef-Mehdorn-trifft-auf-eigene-Klage-article12083741.html – glglgl Sep 08 '22 at 09:02

3 Answers3

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Yes

Unless your business is a sole proprietorship it operates as a legal entity seperate from its owners.

It owns its assets an acrues its own liabilities. It can be sued and it can sue others. It can also agree to its own contracts.

Typically the only thing a legal entity that is not a natural person cannot do is sign a marriage contract.

Depending on the industry there may be no need to sue. There exist many mandatory workplace insurance to cover accidents in the workplace.

You may have to share details of the injury with them but they may be uninterested in whos at fault.

Neil Meyer
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    Given that OP is the owner, presumably they are probably on the board, the CEO, or both. In such a case, could they be held liable? Probably not in the case of injury, but I do not know where exactly the line is drawn and it would be an interesting thing to hear about. – jaskij Sep 05 '22 at 19:29
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    "Typically the only thing a legal entity that is not a natural person cannot do is sign a marriage contract." The only thing in what category of things? There must be plenty of others - can a business become a (natural) child's legal guardian, can a business have power of attorney over a (natural) person, etc.? - or are these not in the category you're thinking of? – kaya3 Sep 05 '22 at 20:58
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    As ridiculous as corporate influence over our political system has gotten, we still aren’t at the point where the corporate “legal person” can actually cast a vote. – KRyan Sep 06 '22 at 02:48
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    @KRyan not in the US, but in the City of London (not London the city) corporations do vote (and make up most of the vote)! – Tim Sep 06 '22 at 09:45
  • @Tim: Having a legislative chamber for which representation was proportional to taxes paid might help restore some balance to the government, since businesses that successfully lobby to reduce taxes for themselves would as a consequence reduce their voice in government. – supercat Sep 06 '22 at 17:57
  • @kaya3: For another example: a legal entity that is not a natural person cannot be a sole company director (in the UK). – psmears Sep 07 '22 at 14:20
  • @supercat I don’t see why encouraging high tax business would be better. That just means consumers are paying for the company to have a vote. Equally, different industries are taxed differently (e.g. electricity suppliers vs supermarkets). I don’t see why electricity suppliers deserve less representation in this system. – Tim Sep 08 '22 at 10:04
  • @Tim: A common problem with taxes is that nobody wants to pay them, but almost everyone wants to impose them on someone else. If e.g. companies that use solar panels to generate electricity were to successfully push for increased taxes on companies that use windmills, and that in turn gave the latter companies more voice in the legislature, thus establishing an equilibrium. Otherwise, such a successful push would result in the wind-power companies having less money left after taxes to try to resist further tax hikes by asking the public not to support politicians that are over-taxing them. – supercat Sep 08 '22 at 17:37
  • @Tim: The situation would also make government operate a bit more like corporations. If one hundred people each buy one 100 shares in AcmeCo, they would get to vote on shareholder issues, but their votes, combined, would only count for twice as much as a vote by someone who bought 5,000 shares. People with a bigger stake in a company would likely spend more research effort into their shareholder votes, and giving their votes more weight would thus result in the company's direction being driven by more careful consideration than if all shareholder votes were equal. – supercat Sep 08 '22 at 18:04
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Yes

The company doesn't even have to be negligent: workers' compensation is typically strict liability.

More generally, if the company does something to you which gives you grounds to sue, you can sue. If you are directing the company there may be issues of contributory negligence.

Dale M
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  • Does worker's compensation apply when the injury is caused by a worker but the injured person is not a worker (e.g. I might be the owner but not manager of a manager-managed LLC)? – Someone Sep 05 '22 at 05:41
  • If what you are doing is in furtherance of the company's objectives, probably yes. If it is purely incidental, probably no. WC only applies when you are engaged in the course of your employment. – Dale M Sep 05 '22 at 05:42
  • Okay. So if I'm not doing anything in furtherance of the company's objectives, then I can still sue, but strict liability does not apply? – Someone Sep 05 '22 at 05:43
  • "Strict liability" is a very specific term if anyone does inherently dangerous things. In your case the company would just have liability. The same liability it would have to any other person. "Worker compensation" is a special thing to pay compensation to employees. Including employees who injured themselves, and employees where actually nobody is at fault, or someone fixing potholes who is hit by a hit-and-run driver where it is not the company who is at fault. – gnasher729 Sep 07 '22 at 17:12
  • @gnasher729 no, strict liability simply means you are liable even if it isn’t your fault – Dale M Sep 07 '22 at 21:23
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You and the company you own are separate entities. That’s why yo can’t just spend your company’s money, you have to receive it as salary or dividends. Usually.

If your company causes anyone damages of say £20,000 the company can and should pay the damage. Same if the company causes damages to you personally. Obviously you personally would have the damages and the compensation and therefore zero profits. The company would have £20,000 less cash, £20,000 less profits to pay taxes on saving £4,000 and therefore £16,000 less money to pay you or other owners dividends in the future.

Suing should of course be unnecessary if you are the sole owner. Tim Cook might have to sue if an Apple employee dropped a Mac onto his car. There might be legal problems if you as the owner ordered the company to do things that are objectively bad for the company, like in the £20,000 case pay a £100,000 settlement. (Actually, if you have insurance paying for the damage, they might disagree with any payment.)

gnasher729
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    Owners of SME that take money out of the business for personal use is probably the leading cause of why initially succsesful business fail after 2 - 4 years. – Neil Meyer Sep 07 '22 at 10:12
  • Especially if the tax office finds out, and you have to pay at least income tax, national insurance etc because they will take it as income. Plus tax evasion because you didn't declare it. – gnasher729 Sep 07 '22 at 17:07
  • Yes and because the money is not use with the intention to turn a profit it cannot be declared an expense. So the tax burden remains the same while reducing cash on hand. Which is very bad for business. – Neil Meyer Sep 07 '22 at 17:11
  • I've seen an awful example where someone charged £3,000 for work, £5,000 for materials, and thought he could spend £8,000 (instead of at least paying the £5,000 to his suppliers). Went down very very quick. What I learned from it: Don't take drugs (because that was the root cause). – gnasher729 Sep 07 '22 at 17:24