Someone I know lost a lawsuit to a small corporation and I believe that person now owes them around $10,000. If the corporation, which is legal entity, goes out of business (essentially dying) does that individual still owe the money to the nonexistent business? It would be like owing money to a dead person without any relatives... Well founded arguments and factual answers only please
2007-06-28 04:52:08 · 7 answers · asked by silversurfer96er 1 in Politics & Government ➔ Law & Ethics
Yes.
Taht corporation still has creditors and the bills owed to it are assets for the creditors.
If your friend simply decides not to pay, then when probate gets wrapped up your friend will then owe that bill plus interest and possibly penalties as well.
2007-06-28 04:57:11 · answer #1 · answered by Jeff Engr 6 · 0⤊ 0⤋
Dissolved Company Owes Me Money
2016-12-12 08:37:04 · answer #2 · answered by ? 4 · 0⤊ 0⤋
I suggest your "FRIEND" check the secretary of state website in your state to determine the status of the company. Just because they no longer have a building, assets or are doing business doesn't mean they have ceased to exist or that another entity has not purchased their assets.
And one of those assets is the judgement against your friend. He will either pay the company, the owner (depending on how the company was formed and the manner of the lawsuit, or the purchaser of the assets.
2007-06-28 05:45:04 · answer #3 · answered by hexeliebe 6 · 0⤊ 0⤋
Because the corporation went out of business, that does not "kill" the corporation. The corporation probably still exists, unless you can find evidence that it has been legally dissolved. Most corporations that "go out of business" don't really dissolve, but they "cease operations."
In most cases, the corporation will assign their accounts receivable to another party (essentially selling them for pennies on the dollar). They can sell your "contract", or "obligation" to pay them to another party who can then legally attempt to collect it.
If, however, the corporation was dissolved without assigning your obligation to another party, then you are correct. The corporation would be unable to take action against you to collect its money since the corporation would no longer exist.
2007-06-28 04:58:18 · answer #4 · answered by Scotty Doesnt Know 7 · 1⤊ 0⤋
Yes. There is a probate of sorts to tie up the loose ends of the business. Money would be owed to that.
2007-06-28 04:55:48 · answer #5 · answered by Anonymous · 1⤊ 0⤋
He may still owe money to the head of the company but it would more than lightly be setteld in court
2007-06-28 05:01:43 · answer #6 · answered by Anonymous · 0⤊ 0⤋
No, but they would owe it to the receiver who is paying any creditors the business had.
2007-06-28 04:55:07 · answer #7 · answered by hugahugababy 2 · 1⤊ 1⤋