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.