A LLC is a unique type of business entity. It is regarded by many as convenient since it enjoys the flexibility of the tax status that is often applied to a partnership. At the same time, it enjoys the limited liability that is also applied to companies. In both cases, it does enjoy a lot of advantages. However, since a LLC also incurs debts in the process of business operations, it is also prone to a legal action by creditors comes the time that it is not able to make payments when they become due and demandable. When this happens, a LLC business bankruptcy could be opted for. It is entitled to file for either a Chapter 7 liquidation or a Chapter 11 reorganization.
