How do I collect an unpaid invoice from an LLC or corporation?
How do I collect an unpaid invoice from an LLC or corporation?
Short answer
File a claim against the business entity — not the individual owner — using the registered business name. If the LLC was a shell or was dissolved, you may be able to pierce the corporate veil if fraud or commingling is proven, but this requires an attorney.
When collecting from an LLC or corporation, your claim is against the entity itself, not the individual owner. Practically: you sue the LLC, any judgment attaches to the LLC's assets, and you collect from business accounts. Find the correct legal name and registered agent in your state's Secretary of State business database. Most are searchable online. Use the exact registered name on the demand letter and any court filings.
The corporate veil protects owners from personal liability for business debts unless the business was set up or operated fraudulently. Commingling personal and business funds, using the business as an alter ego with no real separation, or forming it specifically to defraud creditors are the typical fact patterns. Piercing the veil is possible but requires litigation and an attorney; it isn't a step you take unilaterally. In most collections situations, pursue the entity first and pierce the veil only if the entity has no assets and you have strong evidence of fraud.
If the LLC or corporation is dissolved, check whether your state allows claims against dissolved entities within a window after dissolution. Many states allow creditors to pursue claims against a dissolved LLC for one to three years if proper winding-up procedures weren't followed. If the business simply abandoned operations without formally dissolving, assets may still be attributable to the entity. An attorney familiar with your state's LLC statutes is essential for these situations.