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If the sole owner of a smllc files a personal bankruptcy, is the LLC also considered filing? What is the law that governs this

Richmond, CA |

Sole owner of an LLC files Chapter 13 bankruptcy in California. A taxing authority has stated it will not recognize the LLC as filing because the LLC is named as DBA so it will not recognize the LLC as filing and will object to the outstanding balance being included in the Ch. 13 plan.

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Attorney answers 2


Without knowing more about your situation, I can only state the obvious which is that the person who owns an LLC is not the same entity as the LLC. A bankruptcy of the owner leaves the corporation and its debts intact. Whether that is satisfactory in a particular situation involves many issues and requires expert consideration. You need to consult with a qualified bankruptcy attorney in your area.


As an addition to my colleagues earlier response, the sole member, if he/she files personal bk, may discharge obligations arising from personal guaranty(s) which were executed by the SM, in his/her individual capacity, in conjunction with loan(s) received by the SMLLC.