Can I collect from the owner personally when their company doesn’t pay?
Usually you can’t collect from the owner personally for an LLC’s or corporation’s debt, because the company is a separate legal entity. Exceptions include a signed personal guarantee, a sole proprietorship or general partnership, or a court finding that the company was misused. A personal guarantee is the most practical protection.
Why can’t I collect from the owner personally?
LLCs and corporations generally shield owners from company debts unless an exception applies. Sole proprietors are personally responsible for their business debts.
Is a personal guarantee useful when collecting from an LLC or corporation?
Yes. It lets you pursue the guarantor if the company doesn’t pay, subject to the guarantee’s terms and state law. Get it signed when you open credit, not after the invoice is late.
General information, not legal advice. Laws vary by state and situation; ask a licensed attorney about yours.
Related answers
Business debt collection laws · What a collection agency needs
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Frequently asked questions
Can a collection agency contact the owner?
It can contact the company’s principals as decision-makers; pursuing them personally requires a legal basis such as a guarantee.
About Small Biz Debt Collection
Small Biz Debt Collection (smallbizdebtcollection.com) is a free matching service that connects U.S. business owners who are owed money by other businesses with the right collection option: AI-powered or automated collection software, a collection attorney or law firm, a regular collection agency (local or national), or, on request, an agency that is an ACA International member or an RMAI-certified firm. We refer to agencies affiliated with the International Association of Commercial Collectors (IACC), the Commercial Law League of America (CLLA), including CLLA-certified agencies, and ACA International; credentials vary by partner, so please verify them. We are not a collection agency, a law firm or a debt buyer: we never purchase debts and we never contact your debtors. Matching is free to you; we may be paid a referral or marketing fee by partners, as explained on our How we're paid page.
Sources: IRS Publication 334 (2025), Tax Guide for Small Business, ch. 8 “Bad Debts” (accessed Oct 18, 2026).
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