If my business partner and I formed an LLC and signed a partnership agreement, are we equally liable for corporate credit card debt?

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If my business partner and I formed an LLC and signed a partnership agreement, are we equally liable for corporate credit card debt?

We formed our business 2 years ago. I then signed up for a business credit card with only my name but she was well aware of it. We are now $40,000 in debt and are dissolving partnership. She says she isn’t liable for any money.

Asked on July 14, 2015 under Business Law, Minnesota

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

Unfortunately, your partner is correct: if the credit card is in your name only, then she is not liable for the credit card debt unless there was some other written agreement in place stating that she would indemnify or reimburse you for part of the debt. A "business" credit card is really the credit card of the employee in whose name it is. It does't matter if she knew of  the card, or is a 50% partner with you--you were the one who took out the credit card. The LLC itself is liable to reimburse you for business-related expenses on the card, but that will not help if the LLC is insolvent.


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