Kent & Wittner, P.S.
ROY W. KENT | BRETT L. WITTNER | KELLY M. WITTNER
Putting Lives on Track.

Kent & Wittner, P.S.

ROY W. KENT | BRETT L. WITTNER | KELLY M. WITTNER

Putting Lives on Track.

"Our top priority is to make each client feel valued and respected. We know that families in distress are under a lot of pressure. We also understand that we might not catch you at your best. Don’t worry. We keep a box of tissues always at the ready and are prepared to listen and work through any issue.Our goal is to make sure you leave with a smile on your face – even if you didn’t come in that way."

Can a corporation or LLC file Chapter 7 bankruptcy?

Yes, a corporation or limited liability company can file for Chapter 7 bankruptcy. However, corporate entities such as these will not receive a discharge in Chapter 7 bankruptcy. The bankruptcy trustee will simply close the company, sell all of the assets, distribute the proceeds to creditors, and dissolve the corporate entity. As a result, most corporate entities do not need to file Chapter 7 bankruptcy. 

There is an important exception however. The individual owners of a corporation or LLC are generally personally liable for all of the taxes incurred by the corporate entity. However, Washington law provides that the individual owners of a corporation or LLC will not be liable for premiums owed to the Washington State Department of Labor and Industries [See RCW 51.48.055(4)] and the Washington State Department of Employment Security [See RCW 50.240230(3)] if the business files and completes a Chapter 7 bankruptcy. 

Many owners of business may elect to file a Chapter 7 bankruptcy for their business to prevent these type of tax debts from following them personally after the business has closed. 

 

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