International Tax Lawyers Colorado Springs | Definition of Limited Liability
The question is: What is a Limited Liability? It is important to understand that a Limited Liability is a situation where a member has no personal liability for the debts of or claims against the entity by the reason of being a member.
The determination of Limited Liability is made based on the local law; so even though the general framework, whether a company is a corporation or a partnership, is determined by US Law. The very fact, the most important factor of whether a person/member has Limited Liability or not is determined by local law. So in this case it would be French Law.
Comment: ‘So you are saying that this is what the IRS code says?’ Exactly! These are straight from the regulations.
Do you think organizational documents would matter.. of the company? Answer: ‘Yes’. Partially, yes; as long as local law says that: yes, it is possible for the entity and its organizational documents to assign Limited Liability or to remove Limited Liability from the member.
