Theron Morrison and the Morrison Law Group have assisted 20,000 clients in solving, withstanding, and understanding their financial problems. Many of these clients have been Utah residents and individuals. But also included in this vast array of clientele are business enterprises. Some of these enterprises are incorporated, some unincorporated. The Morrison Law Group has also helped many business sole proprietors take advantage of getting a fresh start.
A sole proprietorship is an unincorporated business owned by a single person. It may also be owned by a married couple. A sole proprietorship is not an incorporated business. It is also not structured like an LLC (limited liability company). Any business venture that forms without some artificial entity created as a result of such formation is a sole proprietorship.
Sole proprietorships are not separate, distinct legal entities like corporations, limited liability companies, or partnerships. There is generally no liability for business debts for the shareholders of a corporation or members of an LLC unless the debt is personally guaranteed. In a partnership, general partners are liable for business debts while limited partners are not liable for any such obligations.
The most important point about a sole proprietorship is that because it is not separately distinct from its owner, any obligation to a creditor for business debts may be satisfied from the owner’s personal assets. Sole proprietors must also keep in mind that a Chapter 7 bankruptcy trustee may suspend a sole proprietor’s business while the bankruptcy case is pending, to prevent the business from incurring additional debt.
The fact that a sole proprietorship is not an entity separate from its owner affects how a bankruptcy case may be filed. Specifically, an individual owner may not file a bankruptcy in the name of a sole proprietorship. In contrast, a bankruptcy case may be filed in the name of a corporate entity. The owner and operator of a sole proprietorship must file a bankruptcy case in his or her name regarding business obligations owed by the sole proprietorship.
Theron Morrison may provide invaluable assistance to anyone who operates a sole proprietorship and is experiencing financial problems.
A substantial advantage if a sole proprietor’s debts primarily originate from the business is that there is no requirement that a debtor/sole proprietorship completes the means test to file a Chapter 7 bankruptcy case.
In contrast, a disadvantage is that most business-related property, except tools of the trade, is not exempt property. Therefore, this property may be liquidated to repay general, unsecured creditors.
Theron Morrison cares about protecting your rights. Theron Morrison and the attorneys at MLG are experienced in battling creditors and will assert a debtor’s rights and demand that lenders respect the same! Talk to the Morrison Law Group about your Chapter 7 or Chapter 13 bankruptcy options. Call 801.456.9933 today to schedule a FREE consultation. We are Utah’s only statewide bankruptcy law firm and have locations in Ogden, Logan, Sandy, and St. George to serve the residents of the counties of Weber, Cache, Salt Lake, Utah, Morgan, Davis, Washington, and surrounding areas.