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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?

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  • 12
    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... Commented Sep 5, 2022 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
    Commented Sep 5, 2022 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
    Commented Sep 5, 2022 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
    Commented Sep 5, 2022 at 22:49
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    @MichaelHall Not only can you sue your own LLC, you can sue yourself! Commented Sep 6, 2022 at 5:41

3 Answers 3

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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.

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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
    Commented Sep 5, 2022 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
    Commented Sep 5, 2022 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
    Commented Sep 6, 2022 at 2:48
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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
    Commented Sep 6, 2022 at 9:45
  • @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
    Commented Sep 6, 2022 at 17:57
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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.

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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
    Commented Sep 5, 2022 at 5:41
  • 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
    Commented Sep 5, 2022 at 5:42
  • 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
    Commented Sep 5, 2022 at 5:43
  • "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
    Commented Sep 7, 2022 at 17:12
  • @gnasher729 no, strict liability simply means you are liable even if it isn’t your fault
    – Dale M
    Commented Sep 7, 2022 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.)

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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
    Commented Sep 7, 2022 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
    Commented Sep 7, 2022 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
    Commented Sep 7, 2022 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
    Commented Sep 7, 2022 at 17:24

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