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Sue as a Company, as Individual, or Both?

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By Tanya Roth, Esq. on March 25, 2013 1:05 PM

If you're a business owner and you want to sue over damages to your company, how should you file your lawsuit? Should you sue as a business, or as an individual?

That's a tricky question, and one that could potentially cost you your entire case. For example, a judge may throw out a case if the plaintiff bringing the suit has no standing to sue, or if the suit was filed in an improper jurisdiction.

Here are three factors you'll want to consider:

  • Who was injured? Were you personally injured as a result of the other party's misconduct? If that's the case, you might have a better cause of action if you sue as an individual. If, however, the property damaged belonged to your company, then your company should sue.

  • What kind of entity do you have? If you have a sole proprietorship, then you don't legally distinguish between yourself and the company. You're essentially one and the same. If, however, you have a corporation or an LLC, then your business entity is distinct from you and enjoys its own legal status.

  • What was your relationship to the party who caused the damage? Was it someone you had a business relationship with, or was it someone with whom you had a personal relationship? Why were they at your place of business? Were they there on official business? Did your business have a contract in place with them? These questions will be important in determining whether your business should sue or whether you should sue as an individual. If the other party's presence was based on a business relationship, then suing through your business may make more sense.

While you might consider bringing the lawsuit under both your name and the business' name (i.e., a joinder of plaintiffs), that may not always be feasible, depending on your claim. There are also practical concerns, as it's not always worth your time and money to sue. For advice about your specific situation, it's wise to consult an experienced business lawyer first.

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