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Richard - Bizlaw
Richard - Bizlaw, Attorney
Category: Business Law
Satisfied Customers: 10374
Experience:  30 years of corporate, litigation and international law
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Need attorney whos familiar with California corporate law:

Resolved Question:

Need attorney who's familiar with California corporate law: I incorporated my plumbing business about 9 years ago. Recently, I dissolved the corporation. The problem is that I now have a customer who is claiming the work I did when I was still a corp caused extensive water damage to his home. How does this play out? Is the work that was done at the time when I was still incorporated a problem for the corporation, or am I personally responsible because the corporation is now dissolved? ---Thanks.
Submitted: 5 years ago.
Category: Business Law
Expert:  Richard - Bizlaw replied 5 years ago.

bizlaw :

The corporation remains liable even though it is dissolved. To the extent assets were distributed to shareholders upon dissolution, then to the extent of those assets distributed the shareholders will be personally liable for the corporate debts but not beyond that. I do not know how long ago you did the work but there may be a statute of limitation issue.




This communication is not intended as legal advice. A local attorney should always be consulted for legal advice. No client/attorney relationship is intended or created by this communication.


Customer :

I don't think I explained the situation very well. There are no shareholders. I am a one-man operation. When you say the shareholders will be "personally liable for debts" do you actually mean me? And if it comes down to me then the corp doesn't really protect me at all, does it?

Expert:  Richard - Bizlaw replied 5 years ago.

I had to switch from chat so I could see your answer. Let me clarify as my answer applies whether there are a thousand shareholders or one. Let's suppose when you dissolved the corporation and after paying all debts you had $10,000 which you distributed to your self. That $10,000 is what you are liable for because if the corporation had not dissolved the $10,000 would be available for the corporate debt. So if the claim is for $25,000, you would be personally liable for up to the $10,000 you received from the corporation.

 

This communication is not intended as legal advice. A local attorney should always be consulted for legal advice. No client/attorney relationship is intended or created by this communication.

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