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TJ, Esq.
TJ, Esq., Attorney
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I sued a corporation for damages. They filed a cross-complaint

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I sued a corporation for damages. They filed a cross-complaint against me and an LLC that has been suspended and not doing business for the last several years. I own the LLC. Since the LLC cannot defend itself while it is suspended, what happens after 30 days if it does not provide an answer to the complaint...does the entire ridiculous content of the cross complaint get judged against the LLC without evidence, and then I go on to the trial?....
Submitted: 3 years ago.
Category: Business Law
Expert:  TJ, Esq. replied 3 years ago.
Hello and thank you for allowing me the opportunity to assist you.

The LLC should defend itself even though it is suspended. In other words, you should hire an attorney to represent it. A suspended LLC can still be sued under certain circumstances, and it may still defend itself even though it's suspended.

If the LLC is not defended, then the corporation could win by default against the LLC. Of course, that may not really mean anything if the LLC remains suspended and has no assets.

Have I satisfactorily addressed your concerns? If not, then feel free to let me know, as I will be happy to clarify my answer or help with your follow-up questions. In the meantime, please remember to click the green accept button so that I will receive credit and compensation for my time (doing so does not end our session). Positive feedback is always appreciated as well. Thank you and good luck!
Customer: replied 3 years ago.

I was told the following which is why I felt I was in a catch-22:

 

Further... Effects of Suspension and Forfeiture

When a corporation or LLC is suspended or forfeited it loses its powers, rights, and privileges. A suspended or forfeited corporation or LLC cannot:

  • Legally transact business.
  • Enforce contracts.
  • Bring an action or defend itself in court.
  • Be granted an extension of time to file.
  • File a claim for refund or amended return.
  • File or maintain an appeal before the Board of Equalization.
  • Begin or continue to protest an assessment.
  • Sell, transfer, or exchange real property.
  • Keep their exclusive rights to the entity's name.

However, you are indicating that the LLC CAN defend itself...I am confused...is there a civil code or procedure or something that governs this?

Expert:  TJ, Esq. replied 3 years ago.
Hi again.

I should have given more details, as my answer gives the wrong impression. I should not have written that the LLC can defend itself if it remains suspended. If you hire an attorney, he can file a motion to continue (if necessary) and then cure the suspension so the LLC can take part in the lawsuit. That is typically what happens.
Customer: replied 3 years ago.
thank you...but I am still trying to determine if whatever is claimed in the cross-complaint automatically becomes a judgment against the LLC, regardless of the evidence or outrageous claims for monetary damages....
Expert:  TJ, Esq. replied 3 years ago.
Hi again.

Generally speaking, the answer is yes. If the LLC does not defend itself, then it will lose by default. In other words, if a defendant does not file an Answer, then all of the allegations in the Complaint are considered to be admitted.

However, even if the plaintiff wins by default, that doesn't necessarily mean that he'll get all of the money damages that he has demanded. The judge may still require evidence of damages before awarding a judgment. If the amount of damages claimed is outrageous, then the judge may award a smaller judgment.
TJ, Esq., Attorney
Category: Business Law
Satisfied Customers: 9769
Experience: Licensed to Practice Law
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