What happens if I sign a 10 year lease, open a business, and it fails, in say 2 years? I’ll be signing the lease through a corporation - does that shield me personally from making lease payments, or am I personally responsible for the lease payments come hell or high water?
If the corporation itself is signing the lease, you are not personally responsible. Recognize, however, that if the company owes on the lease, you will not reap any profit from the dissolution of the corporation, the lessor will have rights to any assets that the company has, in order to lessen the financial impact of the busted lease. When the corporation is dissolved, the debtors will have first rights on the proceeds of the sale of the corporations assets. These rights follow a strict order, and you, as a stockholder, are last on the list.
Make darn sure that the corporation is set up and running before you sign the lease. The lessor will be conducting a transaction with the company, not with you, you are merely an officer in the company.
Clarification, my post relates only to a legal Corporation. Corporations are a legal construct that must be set up with your state. If you just “open for business” you are not a Corporation, you are a Sole Proprietorship and will be responsible for the lease regardless of the success of your business. This is very important, if you want to be legally separated from the business finances, you must set up the corporation with your state in accordance to your local laws.
I agree with what Chessesteak has said (especially the part about making sure you incorporate before you sign the lease or begin operating the business), but I’d also note that if the corporation is new and has no track record of profitability, there’s a good chance that your lessor will require you personally to co-sign the loan, meaning that you would be liable out of your own bank account if the corporation defaults.
–Cliffy