Who is liable for the debts of a business?

In Washington, the business owners are generally liable for the debts of a business. Depending on the type of business, the owners may be personally liable for the debts of the business. Sole proprietorships, for example, are owned by an individual and the owner is personally liable for the debts. In a partnership, the partners are jointly and severally liable for the debts of the business, meaning that each partner is liable for the debts of the business, while the other partners are not. In a corporation, the shareholders of the business are generally not liable for the debts of the business. This type of business is treated as a separate legal entity for liability purposes. However, the shareholder can still be held personally liable for certain types of debts, such as those related to certain taxes. Additionally, directors of the corporation can also be held liable for certain types of debts, such as those related to fraud or financial mismanagement. Finally, creditors can pursue legal action to try and hold the business owners personally liable for the debts of the business. This is an often lengthy and complex process, so creditors will generally attempt to seek payment from the business first before pursuing the owners for payment.

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Who is liable for the debts of a business?

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