Reply To: If an LLC goes bankrupt and its assets aren’t sufficient to cover its debts, who ends up being responsible for the shortfall?

[Simon Haughtone]

I believe that the owners or members of an LLC are not personally liable for the company’s debts, meaning they risk only their investment in the LLC. Does this imply that creditors extending loans to the LLC face the possibility of not recovering their lent amounts if the LLC fails? If that’s the case, what incentives do lenders have to provide financing to these businesses?