Which statement accurately describes the liability of LLC members?

• A. Members have no personal liability for LLC debts.
• B. Members are personally liable for all debts
• C. Members must sign personal guarantees
• D. The LLC is unable to sue or be sued against.

Answer: (A)

The key idea is that LLCs provide limited liability protection to their members. In a typical LLC, members aren’t personally responsible for the debts and obligations of the business; their risk is generally limited to what they’ve invested in the company. That’s why the statement matches the concept: personal assets are protected from the LLC’s creditors in ordinary circumstances.

There are important caveats. If a member personally guarantees a loan or obligation, they can be liable for that specific debt. If the LLC’s separate entity status is disregarded through practices like fraud, commingling funds, or severe undercapitalization, a court may “pierce the veil” and hold members personally liable. Also, the LLC itself can sue or be sued in its own name, which means the entity isn’t incapable of legal action—only the members’ personal liability is typically limited.

So, the described protection aligns with the general purpose of an LLC: shielding members’ personal assets from the company’s debts, with notable exceptions.