As such, the corporation or LLC sets up contracts, owns assets, and is liable for its business debts.
Doing Business as a Limited Partnership, Corporation, or LLCĪ corporation and a limited liability company (LLC) are both treated as separate legal entities separate from the owners. The bankruptcy should not show on your credit report since it was not a personal bankruptcy. If there are remaining debts to be paid after the liquidation of the partnership property, the general partner or partners are still responsible for any remaining unpaid debt.Ī creditor can report outstanding debts to the credit bureau(s) under your name. This means the partnership can file for bankruptcy on its own. In this type of business, the assets are owned by the partnership. Operating a business as a partnership with you as a general partner makes you personally responsible for the business debts of the partnership. The bankruptcy will be visible for up to 10 years on your credit report. This means you are responsible for its debts.ĭischarging business debts as a sole proprietor requires that you file personal bankruptcy. If you operate a business as a sole proprietorship, you own the business assets personally. Updated July 14, 2020: Doing Business as a Sole ProprietorshipĪs a sole proprietorship, the law views you and your business as one in the same.
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