FINP 5008

Discussion 1:

1. What is your main take-away from this article? What did you learn the most? As well as many of these entrepreneurs I wasn’t aware to what extent the personal loan guarantee can affect you in case you have to file for bankrupt disregarding of what type of business you are in. I learn that it’s ok to have great faith on your business or ideas but it’s also essential to understand exactly what risks you face if you run into trouble. There’s not a single forms of business organization that will guarantee you a complete protection from creditors going after your personal assets in a case of a bankruptcy if the business debt you were liable did not get pay off in the bankruptcy.

2. How does a firm's bankruptcy affect the owner of a sole proprietorship? Since there’s no legal distinction between the owner and the business, creditors can go after your personal assets and in a worse case scenario after your spouse.

3. What is an LLC? How does an LLC or corporation differ from a sole proprietorship or partnership if the firm goes bankrupt?

A Limited Liability Company (LLC) or Limited Partnership is a one or more main partner who will run the business and make unlimited liability, but there are one or more limited partners (investors) who do not actively participate in the business whose liability is limited to the amount of their investment in the business.

LLC differ from a sole proprietorship or corporation in a bankrupt process due that on a LLC the investors or members are only responsible for the amount or part they own on the business. On a sole partnership there is a single person responsible for the debt. If a business debt you were liable for didn’t got paid off in the bankruptcy, that creditor can now look to your personal assets to satisfy the obligation.

4. How