[Avodah] T'uM

[Joseph C. Kaplan]

Let's look at the issue about the LLC and its creditor from a real world perspective.  A person is setting up a business.  He's comfortable, has a nice house, some money put aside for his kids' yeshiva and college education, and some other assets. He lives nicely but not ostentatiously, and while not the biggest ba'al tzedakah, gives an acceptable amount. 

He thinks his new business will succeed but he's a realist and knows that many businesses do not.  So he isn't willing to risk his home and assets on the business other than to the extent he will be investing some assets in the business.  So he sets up an LLC which, like a corporation, limits the personal liability of the individual participant in the business.  so he'll lose money of the business fails (the amount he invested) but his risk is known and limited. And the business fails.  So the suggestion of some is that all the businessperson's efforts were for naught from a moral perspective.  All his assets were at risk "morally"; "morals" may demand that he may have to put his kids on scholarship in their yeshivot because his education savings account will be depleted; he may have to move to a smaller house or apartment.

I understand that I'm presenting an extreme situation.  But if it's "the right thing to do" to use individual assets to pay off the debts of a business that was formed specifically to protect such assets, there are going to be lots of negative ramifications to all sides of the transaction.  Might a person consider using some of his assets to pay off such debts from a lifnei meshurat hadin perspective?  Sure, depending on lots of circumstances.  But to set it up that if one doesn't do so he is acting legally but not morally is, I think, unfair, and I have yet to see any citation to any halachic or moral source that would support such an assertion.

Joseph Kaplan
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.aishdas.org/pipermail/avodah-aishdas.org/attachments/20080703/fbae1b31/attachment-0002.htm>