My corporation and business partner were sued - am I also liable?

If the corporation is in partnership with an individual, you should have something like a "joint venture" or "partnership" account. He should not be on your corporate account. If you respect the rules of corporate formation (such as issuing stock) and maintenance (always signing your name as xx, president of yy corp.) you should not have personal liability. Piercing the corporate vail occurs much less frequently than people imagine. Since the corporation cannot appear in the lawsuit without a lawyer, you should look for one immediately and ask your retained attorney. You many contact me via my profile for any follow up, since further, more in depth analysis on a public forum such as would not be protected by the attorney client privilege.

Any efforts you take now to hinder, delay or defraud potential creditors might constitute a fraudulent conveyance under the law. A fraudulent conveyance claim is set forth in the Uniform Fraudulent Transfer Act (UFTA), which is codified in California Civil Code section 3439 et seq. “A fraudulent conveyance is a transfer by the debtor of property to a third person undertaken with the intent to prevent a creditor from reaching that interest to satisfy its claim.” (Yaesu Electronics Corp. v. Tamura (1994) 28 Cal.App.4th 8, 13 .) A transfer under the UFTA is defined as “every mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with an asset … , and includes payment of money, release, lease, and creation of a lien or other encumbrance.” (Civ. Code, § 3439.01, subd. (i).) “A transfer of assets made by a debtor is fraudulent as to a creditor, whether the creditor's claim arose before or after the transfer, if the debtor made the transfer (1) with an actual intent to hinder, delay, or defraud any creditor, or (2) without receiving reasonably equivalent value in return, and either (a) was engaged in or about to engage in a business or transaction for which the debtor's assets were unreasonably small, or (b) intended to, or reasonably believed, or reasonably should have believed, that he or she would incur debts beyond his or her ability to pay as they became due. [Citations.]” (Cortez v. Vogt (1997) 52 Cal.App.4th 917, 928 [60 Cal. Rptr. 2d 841], fns. omitted; see also Civ. Code, § 3439.04.) California Civil Code §3439.04 provides: “A transfer made or obligation incurred by a debtor is fraudulent as to a creditor, whether the creditor's claim arose before or after the transfer was made or the obligation was incurred, if the debtor made the transfer or incurred the obligation as follows: (a) With actual intent to hinder, delay, or defraud any creditor of the debtor. (b) Without receiving a reasonably equivalent value in exchange for the transfer or obligation, and the debtor: (1) Was engaged or was about to engage in a business or a transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction; or (2) Intended to incur, or believed or reasonably should have believed that he or she would incur, debts beyond his or her ability to pay as they become due.” Civil Code section 3439.07 5 sets forth the remedies in a fraudulent conveyance action. Under subdivision (a)(1) of that section, a creditor who makes a successful fraudulent conveyance claim may obtain “[a]voidance of the transfer or obligation to the extent necessary to satisfy the creditor's claim.” Therefore, a fraudulent conveyance claim requesting relief pursuant to Civil Code section 3439.07, subdivision (a)(1), if successful, may result in the voiding of a transfer of title of specific real property.

I recommend that you contact a litigation attorney at your earliest convenience. A corporation will typically protect its shareholders from personal liability if the shareholders operate and manage the corporation like a business entity and not like an extension of the individual. Thus, if you maintain a separate bank account(s) for the corporation, enter into contracts as a director/officer of the corporation, maintain appropriate records of material corporate actions, etc., your corporate structure may protect your personal assets from being attached in a lawsuit even in one in which you are personally named. That determination will be based on facts which you've not provided in your question. If the plaintiff seeks to "pierce the corporate veil"/claim alter ego liability, he/she/it will have the burden of proving such a claim. You'll want to discuss facts pertinent to determining the viability of plaintiff's potential alter ego claim with your attorney. You've stated that the corporation is being sued. As corporations are business entities that cannot self-represent, you should consult a litigation attorney. Even if you are not individually named, the corporation will have to answer the complaint that has been filed against it. You should likewise discuss the issue with the corporation's insurance company. You do not explain why your business partner was personally named in the lawsuit or why he is a signatory on the corporation's bank accounts. This will be an important fact. Unless your business partner is an officer, a key employee or a director of the corporation, he really shouldn't be a signatory on the corporation's business account without some sort of agreement between him and the corporation. You'll also want to discuss the potential for the company having to indemnify your business partner as a result of the plaintiff's suit against him with your attorney.