If, i Have a LLP and i am trading in stock market by my LLP . what happen if my LLP have big Losses in stock market one day

if, i Have a LLP and i am trading in stock market by my LLP . what happen if my LLP have big Losses in stock market one day and My LLP don’t have enough money and assets to pay Losses…i’m personally liable for pay the losses or not?

It doesn’t matter what constitution type you trade with, if you lose more money than what you’ve maintained with your broker, your broker is going to bound to ask you to make good the debit balance. You can’t get away saying its an LLP and hence your liability is limited.

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okey like Donald trump did 4 times corporate bankruptcy. Donald trump not personally liable for corporate bankruptcy .Trump Still a billionaire …

what happen when my LLP have very big losses in stock…and LLP can’t have enough money or assets to pay very big Losses and LLP filed corporate bankruptcy…i’m personally liable for pay the losses or not?

The broker can file a civil suit against the LLP. The court can decide in such cases if the corporate veil can be lifted which is to say if the individual(s) behind the LLP/company should be held personally liable.

thanks mohit :slight_smile:
yes it’s true… ''The court can decide in such cases if the corporate veil can be lifted
‘’ it’s apply on those LLP / company who doing some thing against Law or hide tax’s or doing scam.

but i’m talking about trading in stocks With LLP it’s not scam or hide tax’s or against Law

LLP/company 100% legit , LLP pay every year corporate tax , LLP not doing any thing against law

so what happen then individual behind LLP / company personally liable for this?

In most cases, the court does not lift the corporate veil. However, the risk is always there since one cannot always predict how a judge might approach such cases.

yeah you are right mohit…
but if court lift corporate veil… what happen next? they can’t find any thing because individual not doing anything wrong or scam or hide tax’s … they just have big Losses in stocks…they just filing bankruptcy for big Losses

If you make losses in the markets, you most often have already paid up by way of upfront margin money. It’s quite simple. You can’t take a bet, lose, and not pay up. It’s not good for your reputation and someone (broker/exchange) eventually will have to make the settlement. Usually, exchanges and brokerages don’t allow you to take positions for more money than what you are good for. There is stringent risk management across the board and unless there’s a technical issue or someone messed up, you can’t expose yourself to more risk than what you’re capable of handling. Settlement is guaranteed to the counter party so exchanges will make sure the brokerage pays and collects the dues from you.

Coming back to the LLP, it’ll be decided internally I guess based on the understanding partners have.