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Ever find yourself in a sticky ethical situation? Mr. Ethics has your back! Mr. Ethics is here to take your questions and give you his input on how to best deal with your situation. Have a question for Mr. Ethics? Send it to and he may respond to you here on the Mr. Ethics Blog.


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Posted By Mr. Ethics, Wednesday, June 24, 2015
Updated: Friday, June 19, 2015

Dear Mr. Ethics,

My partners are telling me we should be forming limited liability corporations for every project we do. They tell me that these “L.L.C.’s” will legally protect our personal assets and the assets of our regular company. They say our only risk is the assets that are in the L.L.C. for the project. Basically, if something goes wrong, we can walk away without much worry. I really like that idea but it kind of feels that in a bad situation we will leave others holding the bag. Can you give me some insight?

Regards, Undecided Partner


Dear Undecided,


LLC’s have been around for decades and are perfectly legal. Those contracting with LLC’s generally know what they are about. So there is nothing wrong with forming LLC’s as a project delivery vehicle. Ethics come into play when the LLC is deliberately underfunded for a project. This is often done to allow the LLC to draw off the profits from the project and then leaving the remaining parties to fund the project and claims that will arise. Consult legal counsel about the pros and cons of a LLC and then use it properly if formed.

Regards, Mr. Ethics

Tags:  Legal  LLC 

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