If a self-employed worker takes on contract jobs and then later on, after finishing any of those jobs, changes their business into a limited liability company,

Who is responsible for any liabilities from a past contract that may still be in continuation? Who is responsible if sued for a past contract?

※Who = Self-employed individual OR newly established company.
※I don't expect a country-specific answer, mostly because it is not an English speaking nation. A general answer or an answer regarding the US or UK(new national laws seem to often be similar) would be appreciated.


1 Answer 1


In general, you cannot neither change contracts nor restrict/nullify other people's rights by your acts alone.

The people who hired you personally have a contract with you, not with your LLC. So, if someone has a claim against you, then their claim should not be contingent of your LLC going bankrupt or not; they have a right to have their damages restored by you (who was the entity they hired).

Otherwise, fraud/liability delinquency would be trivial: get debts on your name and, when the things get difficult, create a shell LLC and let it go bankrupt.

  • How do companies purchase services(such as websites) from other companies and individuals though? I'm assuming when they do so, liabilities are transferred. Is this an issue about who the individual was? Commented Jun 23, 2019 at 22:22
  • 2
    Liabilities are not transfered. If A hires B to do X, and B hires C to do X or part of it, in case of liabilities A can sue B and only B on the terms specified in the contract between A and B. At best, B can sue C if the terms of the contract between B and C give them a reason to do so.
    – SJuan76
    Commented Jun 24, 2019 at 0:00

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