Legal Question in Business Law in California

shut down a business

we closed down a small partnership for a transportation business. we have some advertisement bills. Somebody told me that we are not responsible of these payments because they are billed to the business not to us since business is no longer exists. Could you please tell me if this is true? if not what obligations do we have to fulfill? and if no payments are made does it affect our credit rating?

thank you,


Asked on 10/21/08, 8:26 pm

3 Answers from Attorneys
Carl Starrett Law Offices of Carl H. Starrett II

Re: shut down a business

I concur with the response provided by Mr. Whipple. I would only add that you did not specify what of "partnership" you formed. Some people who form a small corporation will sometimes call it a partership. In that case, you might not be personally liable.

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Answered on 10/22/08, 11:17 pm
Edward Hoffman Law Offices of Edward A. Hoffman

Re: shut down a business

General partners are personally responsible for the unpaid debts of the partnership. If you don't pay, the unpaid bills may be sent to collection under your name and those of the other partner(s). You may even be sued for the money, and will probably lose if that happens. All of these things can impact your personal credit.

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Answered on 10/21/08, 8:33 pm
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

Re: shut down a business

No, it's not true; partners in a general partnership are jointly and severally liable for partnership debts. The creditor can sue either or both of you. If your business had been an LLC or corporation, it would be more difficult for the creditor(s) to come after you personally, but it's not impossible even then. You can't just shut a business down or sell it off and leave the creditors holding the bag.

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Answered on 10/21/08, 8:37 pm


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