Share
LLC (single member) company is having a financial hardship due to pandemic, is not able to meet its obligations and considering to file for bankruptcy. how would it affect the member financially?
see above
in progress
2 Answer
Answer
I single-member LLC is considered a sole proprietorship for tax purposes. The person and the business are not separate. The “company” per se can not file bankruptcy the “person” or owner can. If the company were a corporation then this would be an entity not connected with the owner and in that case the company could file bankruptcy. Your client should consult with a lawyer to review his options.
Thank you! Since it was a flow through entity, I also suggested the owner to consult a lawyer.